***Home ownership is down 0.5% over the last 3 quarters. Some of you may not remember way back to 2003 but those were rough times. I don't know about you guys, but I'm starting to horde canned goods and bullets. OK, I'm kidding, but I do like what the article has to say about a push toward assistance for 30 and 40 year fixed rate loans. If they can streamline the process and lower the fees, 40 year fixed notes may help a lot of people in a lurch right now while still maintaining some integrity in the lending process... Artcle follows:..... Homeownership Rates Continue to Slip An economic pillar cracks, and the subprime mortgage collapse is blamed. Source: BUILDER Online News Service Publication date: August 1, 2007 By John Caulfield The Census Bureau released figures last week showing that the country's homeownership rate had fallen for the fourth consecutive quarter, to its lowest level since 2003. The news lent statistical ballast to the fear that the subprime mortgage meltdown, which is seeping into the prime market, could be undermining federal housing policy that, for the past 20 years, has relentlessly encouraged and promoted the American Dream. The homeownership rate for the second quarter of 2007, according to the Census Bureau's seasonally adjusted estimates, declined to 68.4 percent of 110.3 million housing units that are occupied, compared to 68.6 percent in the first quarter, 68.7 percent in the fourth quarter of 2006 and 68.9 percent in the third quarter of last year. While this falloff might seem insignificant, it represents a retreat for the "ownership society" that the Bush administration - and three administrations preceding his - have erected as a pillar of their housing and economic agendas. Perhaps even more telling is the recent jump in homeowner vacancy rates, which rose above 2 percent for the first time in the first quarter of 2006, and have gone up sharply this year, to 2.8 percent in the first quarter and 2.6 percent in the second. Even in the worst days of the past two housing recessions, during the late 1980s to the mid 1990s, homeowner vacancy rates never exceeded 1.8 percent, which illustrates just how steeply the housing market has descended from its lofty heights over the past 18 months. Housing economist Thomas Lawler, who anticipated a downturn in the market well in advance of most builders and developers, told the Wall Street Journal this morning that he expected homeownership rates to dip to 67 percent over the next two years, as lenders continue to tighten their mortgage approval standards. During this downturn, optimistic builders usually point to the country's still-strong economy (people are still buying homes, after all, even if customers are scarcer) and demographic forces that they are convinced will ultimately regenerate and sustain their businesses. However, the subprime debacle raises serious questions about each of these factors, especially with last week's debt-related collapse on Wall Street in the background. Several new surveys and reports are finding that an inordinately large percentage of minority buyers - the very customers builders insist will pull the housing industry out of its funk - are saddled with subprime mortgages. Forty-five percent of Hispanics in Dallas who purchased homes in 2004 and 2005 did so with loans classified as subprime, or three times the rate of whites in that market, according to data filed under the Home Mortgage Disclosure Act and reported by the Dallas Morning News. In New Jersey, an analysis conducted by the Newark Star-Ledger found that blacks and Hispanics are twice as likely as non-Hispanic whites to be denied a loan and three times more likely than whites to borrow under subprime terms when they are approved for a loan. More worrisome might be the findings of the Washington-based National Community Reinvestment Coalition, which looked at 2.3 million loans in 380 communities, and found that middle- and upper-income Hispanics in 75 metro areas were at least twice as likely as whites with comparable incomes to sign up for high-cost loans. The situation is even more pronounced among middle- and upper-income blacks, who in 167 metropolitan areas were at least twice as likely as whites with similar incomes to receive loans with high rates. It would seem that the presumption that the subprime problem is confined to lower-income borrowers is faulty. No one knows yet how sustainable or precarious those loans will turn out to be. Still, several states have created programs to help struggling owners from losing their homes, such as New York's $100 million "Keep the Dream" refinancing program, which offers 30- to 40-year fixed-rate mortgages up to $417,000, with 100 percent financing. "Homeownership is crucial to growing our economy through New York state," said Gov. Eliot Spitzer, in a prepared statement. HUD is also stepping up its efforts to forestall foreclosures, including pushing buyer and owner education programs and its advocacy for reforming the FHA to become a bigger mortgage player. But with second-quarter foreclosures in California alone rising nearly 800 percent compared with the same period a year ago, and with default warnings in that state up 158 percent, any tremor of instability on the mortgage front is going to feel like an earthquake to builders whose sales and profits keep sliding downhill.