REAL ESTATE TOPICS...Millennials Need a Clear Path to Homeownership.

Millennials have been called many things, but don’t call them pessimists. They reject the gloom and doom of the generations before them. (Lighten up, Generation X!) They are more hopeful, surveys suggest—convinced that their prospects for the future, including homeownership, will only improve.

Their ambition to buy their own homes is strong (at least, those who are old enough to buy: the older millennials, ages 25 to 34), even if they temporarily are driven back to the basements of their parents’ homes.

But despite coming of age in some of the worst economic circumstances in generations, these millennials are now mostly prospering, Jonathan Smoke, chief economist of realtor.com®, said during an hour-long town hall on Monday night titled “Millennials and the Housing Market.”

“It’s so 2012 to say that they are down on their luck,” Smoke quipped during the event hosted by George Washington University in the nation’s capital and streamed online.

U.S. Secretary of Housing and Urban Development Julián Castro, the featured guest at the town hall, shared the optimism. Never mind that the rate of homeownership is at its lowest in nearly a half-century—Castro said his department is working to reverse the slide.

“Generation after generation, the primary vehicle to create wealth in our country has been through homeownership,” he said.

Castro touted the Obama administration policies that, he said, will help generations of future home buyers.

Very tight restrictions on credit have hampered many would-be home buyers, especially younger ones, even as the market has recovered. Last year, the administration took steps to improve access to credit for potential buyers, Castro said.

“If it was true that a few years ago it was too easy to get a home loan, the story of the last couple of years has been that for middle-class folks, whether they are first-time home buyer or not, it has been too difficult,” Castro said.

The challenge, he said, is how to put in place safeguards to prevent another housing crisis while improving access to credit.

“The nation just came out of a significant housing crisis,” he said. “The concern is this: that we learn the lessons of the past so that we don’t slide back to where we were before—but at the same time ensure that we offer opportunity for responsible folks to be able to own a home.”

In January, the Federal Housing Administration, which is part of HUD, reduced mortgage insurance premiums after five successive hikes. The lower fees save the average home buyer about $900 a year, Castro said, adding that there were no immediate plans for another reduction.

“I’ll pat you on the back, so you don’t have to do it yourself,” Smoke told the housing secretary. “It almost immediately changed the market this year.”

Smoke cited an “almost overnight 30% change” in the market share of people using FHA loans. He said 37% of housing loans taken out by millennials this year was through the FHA program.

The 87 million–strong millennial generation—a demographic that outnumbers the baby boomers—offers the housing market the potential for another boom. But saddled with education debt and spiraling rent, some millennials find themselves hard-pressed to save for a down payment.

The FHA, Smoke said, has eased the credit and down payment burdens, helping further broaden homeownership among first-time buyers, a group that includes most millennials.

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In comments before the event, Smoke stressed the importance of getting it right for this generation.

“The future of our country and its economy depends on seeing more and more millennials successfully enter homeownership,” Smoke said. “If qualified and capable young adults do not have the opportunity to own a home rather than rent, we will see less household wealth created by this generation.”

And that’s a concern Castro says is high on his list.

Incidentally, although he’s been on the job just 14 months, Castro is already being touted for a possible new role: running mate for Democratic presidential candidate Hillary Clinton.

“I don’t believe that’s going to happen,” said Castro, a Democrat, who was previously mayor of San Antonio. “I’m convinced that the way to create a great future for yourself is not to forget about what you’re doing now. So I’m just trying to do a good job.”