Obama Fields Housing Questions in Web Chat

Following a speech Tuesday night in Phoenix, in which President Barack Obama discussed his ideas for housing finance reform, the president today took questions from American citizens during a ""live discussion"":http://www.zillow.com/whitehouse/ hosted by ""Zillow"":http://www.zillow.com/ CEO Spencer Rascoff.

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During the question and answer session Wednesday, Obama reiterated his stated goals to bring a gradual end to Fannie Mae and Freddie Mac, to bring private capital into the housing market, and to offer affordable housing options--both rental options and 30-year mortgages.

Obama admitted that while it is the American dream to own a home, not all Americans are in a position to purchase a home. In particular, younger Americans with [COLUMN_BREAK]

student debt may not be in a position to accrue more debt through a mortgage loan.

In fact, Obama said one of the problems leading to the housing crisis was that many Americans who should have been renting were being offered mortgage loans.

Obama plans to combat the housing dilemmas facing young Americans in two ways--by helping ensure affordable rental housing options and by reducing the cost of college.

Money that for past generations would have gone toward a down payment on a house is now going to student debt, Obama said. Thus, helping reduce the cost of college will positively impact the housing market by allowing more young people to purchase homes instead of returning to their parents' homes, he said.

Obama also discussed plans for the future of housing finance, including scaling back Fannie Mae and Freddie Mac's portfolios and encouraging private capital to enter the market.

In most developed countries, the government does not have such a large role in the housing market, Obama said.

""We're actually confident that the private market can step in, do a good job, and the government can be a backstop,"" Obama said, adding, ""In some ways it's a return to earlier models.""