FANNIE MAE, FREDDIE MAC AND CORPORATE WELFARE - Risks to taxpayers
Homeownership rates for the majority of Americans have not increased greatly under Fannie Mae and Freddie Mac. In the first quarter of 1965, before Fannie Mae was partially separated from the federal government, 62.9 percent of all American homes were owned by occupants.
By the first quarter of 1993, this statistic had risen to only 64.2%. In the first quarter of 1996, the overall homeownership rate was 65.1%. By first quarter 2003, the rate was 68.0%.
For Blacks and other minorities, the story is the same: home ownership rates have increased, but minimally. Minorities owned and occupied 38.4% of their homes in 1960 and 43.4% in 1993. By 2003, Black homeownership rates were 48%.
We cannot determine what part of the increase in homeownership is a direct result of Freddie and Fannie. Much of the increase has to do with general economic trends, such as higher salaries, and industry specific factors, like competition among financial institutions.
A report on Fannie Mae and Freddie Mac written by the Congressional Budget Office showed that the increase in home ownership has been purchased at great cost.
So, despite having paid billions in government subsidized profits to Fannie Mae shareholders, home ownership rates in the U.S. have increased, but increased slightly.
Additional information:
Fannie Mae (Federal National Mortgage Corp.) & Freddie Mac (Federal Home Loan Mortgage Corp.)
Questions concerning homeownership
Suggested changes to enhance homeownership
Testimony before the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises
For further information
Other questions
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