The housing market is re-emerging

For so many Americans, housing is where everything begins. Often, where a family lives shapes how they live — the jobs available to them, the educations their children receive, the health outcomes they experience, and the overall quality-of-life they enjoy. That’s why I’m happy to report that the housing market is re-emerging as an engine of economic prosperity.

Families are feeling more confident, as annual home prices have risen for 36 months and homeowners’ equity has increased over $5 trillion since 2009. What’s more, homebuilding has roughly doubled in recent years — something that’s put folks back to work and helped fuel our economy’s resurgence.

2014 was the strongest year for job growth since the 1990s. Businesses have created more than 12 million new jobs over the last five years and job openings are at a 14-year high. Across the United States, optimism is rising and opportunity is expanding. Now, we must ensure that every American participates in this progress.

That’s where the Federal Housing Administration comes in. By providing mortgage insurance for loans, FHA has created opportunity for generations of underserved communities and served as a stabilizing force for our economy. In fact, during the housing crisis, FHA stepped into the void created when private capital retreated — work that independent economists say prevented a further collapse in home prices. Now that we’ve turned the page on the downturn, we’re focused on creating inclusive growth.

We must start by encouraging responsible homeownership. It’s still a cornerstone of the American dream, one of the quickest ways for folks to build wealth and secure a ticket to the middle class.

Our nation is smart enough to heed the lessons of the past without forsaking its future. The answer isn’t denying homeownership to responsible Americans — it’s providing them with opportunity in the right way.

Since 2009, the Obama administration has enacted historic safeguards to prevent our nation from revisiting the Wild West lending environment of the previous decade. For example, the Consumer Financial Protection Bureau now requires lenders to evaluate a borrower’s ability to repay their loan, and prohibits lenders from receiving bonuses for more expensive loans.

The U.S. Department of Housing and Urban Development has also been doing its part through the Office of Housing Counseling. The evidence is clear: housing counseling helps households build better credit and make more informed decisions.  That’s why we’ve announced $36 million in new grants to bolster the work of our local partners.

And when folks are ready to buy a home, we need to give them a fair chance at securing a loan. That means expanding access to credit. Some believe that a few years ago, getting a loan was too easy.  Now, it’s too hard. According to the Urban Institute, the housing market misses out on 1.2 million loans every year because credit is so tight. The pendulum has swung too far in the opposite direction, and we’ve got to move it back to a point that balances opportunity with responsibility.

The FHA is helping to increase the availability of credit by clarifying its policies so that lenders can feel more confident when working with worthy borrowers. And by becoming smarter about enforcement, we’re helping lenders to improve their operations and shape a healthier housing market.

We’re also making homeownership more affordable. Entering 2015, FHA Mortgage Insurance Premiums were at an all-time high and the American dream was becoming too expensive for many working families.

So we took action. In January, we reduced our annual mortgage insurance premiums by half a percentage point, a modest measure that will have a big impact. We expect our premium reduction to help more than 2 million borrowers save an average of $900 annually over the next three years and encourage nearly 250,000 new borrowers to purchase their first homes.

This work complements HUD’s effort to strengthen the rental market. Millions of Americans with limited means spend more than half their incomes on rent, making it difficult to build savings and support their children.

That’s why HUD has launched a number of bold efforts that will attract private investment to enhance public housing, close FHA multifamily deals in a timelier fashion, and connect residents with the jobs, schools and transit options they need to thrive.

Ultimately, housing is about opportunity. Over the last six years, our nation has come a long way in providing families with the chance to obtain the security and stability they need to build for the future. HUD looks forward to working with all our partners to continue this momentum and make 2015 a year of housing opportunity for all.

Castro, the former Democratic mayor of San Antonio, is the 16th HUD secretary.