And that's why I'm traveling around, laying out my ideas for how we have to build thecornerstones of what it means to be middle class: a good job with good wages; a home to callyour own; a good education; affordable health care that's there for you when you get sick; asecure retirement even if you're not rich; the opportunity -- the ladders of opportunity forpeople to earn their way into the middle class, to work their way out of poverty. Those are theelements that I think all of us believe in, but right now we're not delivering as much as weshould on those promises.
Now, last Tuesday, I went to Tennessee to talk about the first cornerstone, which is how do wemake sure that we're creating good middle-class jobs here in the United States of America.Today I've come to Phoenix to talk about the second component, which is the most tangiblecornerstone that lies at the heart of the American Dream, at the heart of middle-class life -- andthat's the chance to own your own home. (Applause.) The chance to own your own home.
We've got a lot of young people here who are thinking about college, they're going to get ahigher education, they're going to find a job, they're going to find somebody they love, they'regoing to want to own a home. And the reason they will is because a home is the ultimateevidence that here in America, hard work pays off, that responsibility is rewarded.
I think about my grandparents' generation. When my grandfather served in World War II, hefought in Patton's Army -- when he got back, this country gave him a chance to go to college onthe G.I. Bill, but it also gave him the chance to buy his first home with a loan from the FHA. Tohim, and to generations of Americans before and since, a home was more than just a house. Itwas a source of pride and a source of security. It was a place to raise kids, to put downroots; a place where you could build up savings for college, or to start a business, or to retirewith some security.
And buying a home required responsibility on everybody's part. You had to save up to buy ahome. And then banks were supposed to give you a fair deal, with terms you couldunderstand, and buyers were supposed to live within their means and make sure that theycould make their payments. So in that earlier generation, houses weren't for flipping around,they weren't for speculation -- houses were to live in, and to build a life with.
And unfortunately, over time, responsibility too often gave way to recklessness. You hadreckless lenders who sold loans to people they knew couldn't afford them. And let's face it, wealso had some reckless buyers who knew they couldn't afford them and still took out loans.And all this created a housing bubble. And especially in some places like Arizona, it wasdevastating when that bubble finally burst -- triggered a recession. Millions of Americans whohad done everything right were hurt badly by the actions of other people. Housing pricesplummeted.
By the time I took office, home values had fallen almost 20 percent from the year before. Newhousing starts had fallen nearly 80 percent from their peak. Hundreds of thousands ofconstruction workers had lost their jobs. A record number of people were behind on theirmortgage payments. And a lot of people here in Phoenix, they saw that devastation. This waspart of Ground Zero for the housing bubble bursting.
So less than a month after I took office, I came here to Arizona and I laid out steps to stabilizethe housing market and help responsible homeowners get back on their feet. And the truth isit's been a long, slow process. The housing market is so big that it was going to take some timeto heal when it got hurt that badly. It's taken longer than any of us would like. But during thattime, we helped millions of Americans save an average of $3,000 each year by refinancing atlower rates. We helped millions of responsible homeowners stay in their homes, which was goodfor their neighbors because you don't want a bunch of foreclosure signs in your neighborhood.
Where Congress wouldn't act, we went ahead and acted, so over the past few years, we had theDepartment of Justice stand up for buyers who had been discriminated against or conned bypredatory lending. And we won a settlement that gave more money to victims ofdiscrimination in one year than in the previous 23 years combined. (Applause.)
We worked with states to force big banks to repay more than $50 billion to more than 1.5million families -- largest lending settlement in history. (Applause.) We extended the time thatfolks who had lost their jobs could delay their payment on their mortgages while they keptlooking for work. We cracked down on the bad practices that led to the crisis in the first place. Imean, you had some loans back there in the bubble that were called “liar's loan.” Now,something that's called a liar's loan is probably a bad idea. (Laughter.)
So because of all these actions we've been taking, our housing market is beginning to heal.Home prices are rising at the fastest pace in seven years. Sales are up nearly 50 percent.Construction is up nearly 75 percent. New foreclosures are down by nearly two-thirds. Millions offamilies have been able to come up for air -- they're no longer underwater on their mortgages. (Applause.)
And just like the crisis hit Phoenix very hard, thanks to some great leadership here locally,Phoenix has also led one of the biggest comebacks in the country. (Applause.) So you should beproud of what you've done here. Home prices in Phoenix have risen by nearly 20 percent overthe last year. New home sales are up by more than 25 percent.
This morning, right before I came here, I visited Erickson Construction -- (applause.) We'vegot some Erickson folks here. And they were explaining how right when the bubble hit,Erickson shrank to less than a hundred workers. Today they're employing 580 people -- andthey're hiring even more people -- (applause) -- because the housing market is bouncing back.
So that's one of the things about housing. It's not just important for the person who owns thehouse; our economy is so impacted by everything that happens in housing. Consumers feelbetter when their home values are in a better place, so they're more willing to spend. A lot ofpeople who want to start a business, their savings may be locked up in their house.Construction workers, contractors, suppliers, carpet makers, all these folks are impacted by thehousing industry.
So we've made progress, and that's helped to move the economy forward. But we've got tobuild on this progress. We're not where we need to be yet. We've got to give more hardworkingAmericans the chance to buy their first home. (Applause.) We have to help more responsiblehomeowners refinance their mortgages, because a lot of them still have a spread between therates they're paying right now on their mortgage and what they could be getting if they wereable to refinance.
And we've got to turn the page on this kind of bubble-and-bust mentality that helped tocreate this mess in the first place. (Applause.) We got to build a housing system that isdurable and fair and rewards responsibility for generations to come. That's what we've got todo. (Applause.)
So I've already put forward a bunch of ideas that will help accomplish that. And, look, the factof the matter is Congress hasn't enacted all of them, so I'd like you to encourage members ofCongress to take some of these actions. (Applause.)
But like the other actions that we've taken, these will not help the neighbors down the streetwho bought a house that they couldn't afford, and then walked away from it and left aforeclosed home behind. We don't want to help speculators who bought multiple homes just tomake a quick buck.
What we want to do is put forward ideas that will help millions of responsible, middle-classhomeowners who still need relief. And we want to help hardworking Americans who dream ofowning their own home fair and square, have a down payment, are willing to make thosepayments, understand that owning a home requires responsibility. And there are someimmediate actions we could take right now that would help on that front, that would make adifference. So let me just list a couple of them.
Number one: Congress should pass a good, bipartisan idea to allow every homeowner thechance to save thousands of dollars a year by refinancing their mortgage at today's rates. (Applause.) We need to get that done. We've been talking about it for a year and a half, twoyears, three years. There's no reason not to do it. (Applause.)