00:09I'm Allison LaForda, and on this episode of 10 Minute Talks, I'm talking to Landy Liu,
00:15the founder and CEO of Foyer. And today we are talking about U.S. Representative Haley
00:22Stevens Homeownership Savings Act. Landy, welcome to 10 Minute Talks.
00:28It's great to be here.
00:30So we have an exciting conversation today. We're going to dig into a bill that's currently
00:36something that you are pretty heavily involved with. U.S. Representative Haley Stevens Homeownership
00:43Savings Act would create tax-advantaged savings accounts for first-time homebuyers. Why should
00:48the housing finance industry be keeping an eye on this bill, and why is it gaining attention now?
00:56Well, Allison, we have been in the homeownership space at Foyer for the last few years, and the
01:05reason we started this company is that we recognize that the down payment is still one of the largest
01:12hurdles for first-time homebuyers, if not the largest hurdle for first-time homebuyers in this
01:19affordability climate. It has only gotten harder over the last few years, and we are truly in a crisis
01:27where the next generation of Americans is seeing a smaller and smaller chance of actually becoming
01:34homeownership ready. And it's frankly not enough just to focus on the transaction. It's also incredibly
01:41important to help people prepare for the transaction. The hard work to buy a home happens years before
01:49the actual transaction. And what we want to do, and what the sponsors of this bill want to do,
01:56is to ensure that as a country we are continuing to see a generation of aspiring homebuyers prepare for
02:05homeownership, a pipeline that will continue to become strong future homebuyers. Now, it's funny when we
02:13think about this act because this already exists in so many other parts of our life. There's tax
02:22advantages accounts for really all major life decisions. There isn't one for homeownership though.
02:29There's, of course, retirement plans, the IRA, the 401k. There's the 529, which was designed to help
02:37parents save for their children's college education. We even have health care savings accounts to help
02:45you save for large emergency health care expenses or just day-to-day expenses. But the biggest purchase of
02:53your life requires the most amount of savings, there isn't an incentivized place to prepare for that.
03:00And that's what this act does. The Homeownership Savings Act is going to create parallelism in this
03:08particular life stage, this goal, which we now know is incredibly important in which we're now seeing
03:15just bipartisan attention for. And we as a company have been building the infrastructure around ahead of
03:23this potential exciting tax change. Now, this bill treats homeownership savings,
03:31to your point, as a distinct financial goal, rather than just something that's a mortgage issue.
03:39How could that shift change the way that aspiring homeowners prepare for actually buying a home?
03:46The main piece of this legislation to keep in mind is that this is really targeted towards first-time
03:54home buyers. And that demographic of first-time home buyers is the one that needs the most help. It's the
04:02one that is the largest demographic in terms of millennials becoming of home buying age. It's really clear as
04:12well that this demographic is giving up entirely on the dream of homeownership. The NAR just put out
04:18research that shows that the average age of a first-time home buyer is now 40.
04:22Isn't that crazy?
04:24It's taking longer. It's nuts. I mean, every generation before was 30s, 20s. It's only going to get older and
04:31older, and the pie is only going to continue to shrink if you don't help people on the pathway to
04:38homeownership. And that's what this act and that's what our product is designed to do. It's designed
04:43to be an on-ramp, a pipeline towards homeownership. You can have a low-rate environment. The industry
04:52is cyclical. We all know that. But if you go to a mortgage company and you don't have savings,
04:56if you go to a real estate agent and you don't have savings, there's nothing to do. And we've all
05:01seen that. We've all worked with clients. We've all heard the stories. This is designed to be
05:08a way for more people to come into not just the market, but come into the aspiration of owning a
05:16home. And holding onto that aspiration is critical. A dedicated account, like in other goals, as we've
05:22seen in behavioral finance, is the best way to keep people focused and holding onto that goal without
05:28easily giving up when any one-off cost comes your way. Something that I was looking at that I thought
05:36was interesting and unique about the proposal is that the ability is there for employers to contribute
05:44to an employee's homeownership savings account. Can you walk the audience through why that's significant
05:50and how that could support home ownership becoming a mainstream workplace benefit?
05:59Yes. This is a very important part of the legislation and it's going to be an unbelievably powerful way
06:08to help first-time home buyers and help this industry prepare first-time home buyers. What this is going to
06:15enable is a clear incentive for employers to contribute towards the first-time home buying
06:23demographics down payment and their savings journeys. It's not going to be free money, just like in all
06:29other types of these accounts. It's usually framed as a match, but it's going to create an incentive around
06:36that match that's tax-advantaged. So as consumers work their way through their own financial ladders,
06:42when you think about someone graduating from college, there are tax advantages for employers to help
06:49with student loan repayments. There are tax advantages to help employees prepare for retirement. What's in
06:57between those two things when you graduate from college and you retire? The biggest thing that almost all
07:04Americans still want is to buy a home one day. And there's a 40-year gap. And this is going
07:12to address
07:13that gap with the most important goal that happens during that gap. And what it's going to do is bring
07:19a lot more capital and a lot more people into the real estate market.
07:24It's funny that you mention that gap and some of the human behavior here and the human desire to be
07:32homeowners and
07:33setting this up as a financial goal. Housing Wires lead analyst Logan Motoshami says that we know that people go
07:41through a general economic cycle. We date, we mate, we get married, we buy a house. 2.5 to 3
07:49years later, we start seeing
07:51people have children and then they go through, they keep that house for a couple of years and then it's
07:56a
07:56whole cycle, right? So we know that that human behavior exists. So it's so interesting to me hearing
08:03you talk about a bill that sort of gives that and meets the American people where they're at outside of
08:10college to retirement. Hearing it positioned that way is really crazy.
08:16It's logical. And that's the beautiful thing about this bill and the products that we're
08:22introducing through our company and the infrastructure we're helping create. It's just
08:27a really simple way to think about the needs of Americans and the different ways to help address
08:38the affordability crisis. We're not trying to reinvent the wheel here.
08:42So if this legislation does move forward, what else will first-time buyers need beyond a dedicated
08:50savings account to successfully transition from renting to homeownership? And where do you see the biggest gaps
08:58today? Well, we are very much as a company focused on not just the financial readiness, but the emotional
09:08readiness. Like we all know in the industry, buying a house is the biggest financial decision and the
09:16biggest emotional decision. So what we've done at Foyer is today we have the first dedicated savings
09:23vehicle for a home. We've created a myriad of incentives to help people. This tax advantage would only add to
09:31the
09:31existing incentives of our product. But that alone is not our app. That alone is not our experience. We parallel
09:41the emotional side of things with the financial side. So all of our members today get access to
09:48an advisor. They get access to education. It's all personalized to them.
09:54And that's really how we should be thinking about this transaction as a whole is there is a long
10:00journey to getting to a mortgage. There's a long journey to getting to a real estate agent.
10:05And it's one that relies upon strong financial readiness and strong emotional readiness. And with
10:12the help of the employers, we think we can accelerate that dramatically. And what Foyer does is it makes it
10:18easy for the consumer to engage with at their own pace, wherever they are in their own kind of home
10:27ownership journeys. So education, personalization, along with the financial product, I think is the key
10:36to making this all a success. Well, Landy, thank you so much for giving us time today on 10 Minute
10:42Talks.
10:42And we'll have to have you back for an update on where Representative Stephen's Home Ownership Savings Act lands.
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