Part 5: Lessons learned

Posted on Friday, February 29th, 2008 at 3:03pm.


“So, looking back, we know what led up to the housing correction – risky lending chasing rising home prices fueling more risky lending – until the bubble burst. Looking at the situation now, there are some short-term remedies to minimize the pain as the correction plays out. Looking ahead, there are some longer-term remedies that would help protect borrowers and sustain a healthy demand for homes.
 
But stepping back from the particular problems and solutions, what are the greater lessons we can learn from this experience, to ensure – as best we can – it never happens again?
 
Lessons tend to get better and clearer over time, but already, at least four seem clear.
 
 
 
 
 
Taken together, these four lessons point, I hope, to a new appreciation for the role of housing in the economy, in the financial markets, in our policymaking and in our political process. The correction has given us an opportunity to come together and remind ourselves of what’s really important: And that is the interests of the families who buy or rent the homes we build, sell, and finance. What’s good for them is good for housing, a good system, which can be made better.”