Homeownership in the United States

In the United States, the home ownership rate is created through the Housing Vacancy Survey by the U.S. Census Bureau. It is created by dividing the owner occupied units by the total number of occupied units. This is an important point to understand changes in the home ownership rate over time. The bust of the housing bubble resulted in many houses becoming foreclosed. However, the decrease in the home ownership rate from 3Q2007 to 4Q2007 was mostly a result of an increase in the renter's population and less due to a decrease in the homeowner population.

Homeownership has been promoted as government policy using several means involving mortgage debt and the government sponsored entities Freddie Mac, Fannie Mae, and the Federal Home Loan Banks, which fund or guarantee $6.5 trillion of assets with the purpose of directly or indirectly promoting homeownership. Homeownership has been further promoted through tax policy which allows a tax deduction for mortgage interest payments on a primary residence. The Community Reinvestment Act also encourages homeownership for low-income earners. The promotion of homeownership by the government through encouraging mortgage borrowing and lending has given rise to debates regarding government policies and the subprime mortgage crisis.

:File:US Homeownership by race 2016.png

The homeownership rate, as well as its change over time, has varied significantly by race.{{cite web|url=https://www.census.gov/housing/hvs/files/annual16/ann16t_22.xlsx|title=US Census Bureau, homeownership by race |access-date=2017-10-29 }} While homeowners constitute the majority of white, Asian and Native American households, the homeownership rates for African Americans and Latinos have typically fallen short of the fifty percent threshold. Whites have had the highest homeownership rate, followed by Asians and Native Americans.

Although a landmark{{cite web |url=http://www.nps.gov/nr/travel/civilrights/mo1.htm |publisher=National Park Service |work=We Shall Overcome: Historic Places of the Civil Rights Movement |title=Shelley House |access-date=June 11, 2013}} United States Supreme Court ruling Shelley v. Kraemer {{ussc|334|1|1948}},{{efn|name=fn1}} ruled invalid exclusionary racial covenants, which almost always barred black citizens from owning a home but often extended to American Jews, Asian Americans, Mexican Americans, and non-citizens and other ethnic groups and could be used by white real estate owners to enforce or introduce racial segregation, threats of legal action allowed them to remain effective for some time afterwards.{{cite web|url=https://www.cnn.com/2020/02/15/us/racist-deeds-covenants/index.html|title=Racist language is still woven into home deeds across America. Erasing it isn't easy, and some don't want to|last1=Watt|first1=Nick|author-link=Nick Watt (CNN reporter)|last2=Hannah|first2=Jack|date=2020-02-15|publisher=CNN|access-date=2020-10-15|url-status=live|archive-url=https://web.archive.org/web/20201002031328/https://www.cnn.com/2020/02/15/us/racist-deeds-covenants/index.html|archive-date=2020-10-02}} Racial steering practices later on also affected patterns of home ownership among non-whites{{cite journal |last1=Pearce|first1=Diana M.|editor-last1=Colvard|editor-first1=Richard|date=February 1979|title=Gatekeepers and Homeseekers: Institutional Patterns in Racial Steering|department=Processes Maintaining Sexual and Racial Inequality|journal=Social Problems|location=Buffalo, New York|publisher=Society for the Study of Social Problems|volume=26|issue=3|pages=325−342|doi=10.2307/800457|issn=0037-7791|jstor=800457|doi-access=}} and the cumulative effects of exclusionary covenants, racial steering, and other segregation measures have resulted in lower property values, less capital accumulation, lower municipal tax revenues, and disinvestment in black communities.{{cite web|url=https://www.cnn.com/2018/12/06/perspectives/black-home-ownership-undervalued-brookings/index.html|title=Homeowners have lost $156 billion by living in a 'black neighborhood'|department=Perspectives|last=Perry|first=Andre|date=2018-12-07|publisher=CNN Business|access-date=2020-10-15|url-status=live|archive-url=https://web.archive.org/web/20181231233609/https://www.cnn.com/2018/12/06/perspectives/black-home-ownership-undervalued-brookings/index.html|archive-date=2018-12-31}} Despite the fact that the Shelley v. Kraemer decision found exclusionary covenants to be unconstitutional under the Fourteenth Amendment to the United States Constitution's Equal Protection Clause {{a.y|1948|round=0}} ago, and hence unenforceable, the clauses are still present in many deeds well into the twenty-first century.

Hispanics had the lowest homeownership rate in the country in all years, except for 2002, up until 2005. For the last half of the decade of the 2000s the homeownership rate for Hispanics exceeded that of African Americans. Temporal fluctuations were slight for all races, with rates commonly not changing more than two percentage points per year.

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File:Homeownership rates by race & ethnicity.png

The strongest increase in the percentage of homeowners in the first half of the decade of the 2000s was among non-white minorities. The homeownership rate for minorities approached the sixty percent mark in 2006, which was a significant change because less than half of all minority households owned homes as recently as 1994. The ownership rate for minorities increased by 25.6%, from 47.7% in 1993 to 59.9% in 2006. This rate fell after the 2006 peak, consistent with overall homeownership rates.

The increase among white Americans was less substantial. In 2005, 75.8% of white Americans owned their own homes, compared to 70% in 1993, and the rate fell during the last half of the decade of the 2000s, slightly more slowly than for the rest of the population. Thus one can conclude that despite a large remaining discrepancy between the homeownership rates among different racial groups, the gap had been closing up until the peak, with ownership rates increasing more substantially for minorities than for whites, but subsequently began slightly widening.

SOURCE: US Census Bureau, 2016

The data from the United States Census Bureau shows black Americans have the lowest rate of home ownership in the US.{{cite web |last1=Connley |first1=Courtney |title=Why the homeownership gap between White and Black Americans is larger today than it was over 50 years ago |url=https://www.cnbc.com/2020/08/21/why-the-homeownership-gap-between-white-and-black-americans-is-larger-today-than-it-was-over-50-years-ago.html |website=CNBC |date=21 August 2020}} According to the National Association of Realtors, blacks and Hispanic Americans face higher mortgage rates than their white and Asian counterparts, and more illegal discrimination in real estate transactions. The Fair Housing Act is a law established to help stop illegal discrimination against potential minority homeowners in the U.S. The law is enforced by the United States Department of Housing and Urban Development.{{cite web | url=https://www.hud.gov/program_offices/fair_housing_equal_opp/fair_housing_act_overview | title=Housing Discrimination Under the Fair Housing Act }} Also, black and Hispanic households usually face more personal challenges such as the likelihood of higher personal debt, lower incomes, lower credit scores, or lower savings than the average buyer for a home purchase.{{cite web |last1=Bahney |first1=Anna |title=The Black homeownership rate is now lower than it was a decade ago |url=https://edition.cnn.com/2022/02/25/homes/us-black-homeownership-rate/index.html |website=CNN |date=25 February 2022}}

Image:Homeownership by household type.jpg

There is a strong correlation between the type and age of a household's family structure and homeownership. As of 2006, married couple families, which also have the highest median income of any household type, were most likely to own a home. Age played a significant role as well with homeownership increasing with the age of the householder until age 65, when a slight decrease becomes visible. While only 43% of households with a householder under the age of thirty-five owned a home, 81.6% of those with a householder between the ages of 55 and 64 did. According to Zillow's data analysis the median age of renters who are heads of households is age 41 years, up from age 37 in 2000.Veronica Dagher and Rachel Wolfe. (22 December 2023). "The Rise of the Forever Renters". [https://www.wsj.com/economy/housing/the-rise-of-the-forever-renters-5538c249 The Wall Street Journal website] Retrieved 24 December 2023.

This means that households with a middle-aged householder were nearly twice as likely to own a home as those with a young householder. Overall married couple families with a householder age 70 to 74 had the highest homeownership rate with 93.3% being homeowners. The lowest homeownership rate was recorded for single females under the age of twenty-five of whom only 13.6%, were homeowners. Yet, single females had an overall higher homeownership rate than single males and single mothers.

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{{main|Income in the United States}}

There are considerable correlations between income, homeownership rate and housing characteristics. As income is closely linked to social status, sociologist Leonard Beeghley has made the hypothesis that "the lower the social class, then the fewer amenities built into housing." According to 2002, US Census Bureau data housing characteristics vary considerably with income. For homeowners with middle-range household incomes, ranging from $40,000 to $60,000, the median home value was $112,000, while the median size was {{convert|1700|sqft|m2}} and the median year of construction was 1970. A slight majority, 54% of homes occupied by owners in this group had two or more bathrooms.{{cite book | last = Beeghley | first = Leonard | year = 2004 | title = The Structure of Social Stratification in the United States | publisher = Pearson | location = Boston, MA }}

According to a 2004 report, among homeowners with household incomes in the top 10%, those earning more than $120,000 a year, home values were considerably higher while houses were larger and newer. The median value for homes in this demographic was $256,000 while median square footage was 2,500 and the median year of construction was 1977. The vast majority, 80%, had two or more bathrooms. Overall, houses of those with higher incomes were larger, newer, more expensive with more amenities.

U.S. home prices are rising significantly faster than incomes. After accounting for inflation, home prices jumped 118% from 1965 to 2021, while income had only increased by 15%.{{Cite web |last=Dickler |first=Jessica |title=Home prices are now rising much faster than incomes, studies show |url=https://www.cnbc.com/2021/11/10/home-prices-are-now-rising-much-faster-than-incomes-studies-show.html |access-date=2023-03-09 |website=CNBC |date=November 10, 2021 |language=en}} High demand and low supply in most cities will likely continue to keep home prices outpacing income increases.{{cite news |last1=Arnold |first1=Chris |last2=Benincasa |first2=Robert |last3=GaNun |first3=Jaqueline |last4=Chu |first4=Haidee |title=There's a massive housing shortage across the U.S. Here's how bad it is where you live |url=https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l |access-date=6 April 2023 |date=14 July 2022 |archive-url=https://web.archive.org/web/20230404104659/https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l |archive-date=4 April 2023 |language=en|url-status=live}} According to a Realtor.com analysis, there was a shortage of about 2.3 million homes by the end of 2022, compared to an increase of about 500,000 since 2012.{{cite news |title=How finding a home in America became so absurdly expensive |url=https://www.theguardian.com/us-news/2023/may/10/us-housing-market-prices-increasing |agency=The Guardian |date=May 2023}}

Homeownership is the primary asset most Americans use to generate wealth. For majority of U.S. homeowners, their home equity represents 50-70% of their net wealth.{{cite web | url=https://www.brookings.edu/articles/rethinking-homeownership-incentives-to-improve-household-financial-security-and-shrink-the-racial-wealth-gap/ | title=Rethinking homeownership incentives to improve household financial security and shrink the racial wealth gap }} In first quarter 2023, the average American with an active mortgage had a home equity close to US$275,000.{{cite web | url=https://www.bankrate.com/home-equity/homeowner-equity-data-and-statistics/#key-terms | title=Homeowner Equity Data and Statistics }}

Homeownership influences the political participation of individuals, with homeowners more likely to participate in local elections.{{cite journal|doi=10.1146/annurev-polisci-050317-071108| doi-access=free| title=Local Elections and Representation in the United States| year=2019| last1=Warshaw| first1=Christopher| journal=Annual Review of Political Science| volume=22| pages=461–479}} Owning a home increases the likelihood of participating in local primaries by 35%. Voter turnout probability increases with the value of the home. Becoming a homeowner influences an individual's political outlook, as they are more likely to vote in ways they perceive as protecting their investment. Being a homeowner increases the likelihood of political participation by 75% when issue of zoning are decided. For national elections, homeowners are more likely than renters to participate in primaries and general elections; their turnout is about 10 points higher than renters for general elections.{{cite news|url=https://www.bloomberg.com/news/articles/2018-08-28/how-homeownership-contributes-to-political-divides| first=Richard| last=Florida| title=The Politics of Homeownership| website=Bloomberg CityLab| date=28 August 2018| access-date=21 October 2020}}

For those who use private mortgages to finance homeownership, their party affiliation polarizes towards one of the two major political parties. Individuals who buy homes through Federal Housing Administration-supported mortgages are much more likely to become Democrats.

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File:Historic U.S. Homeownership Rate, as of 2014.svg

{{Main|List of countries by home ownership rate}}

{{portal|Housing}}

• Starter home
• List of countries by home ownership rate
• Household income in the United States
• Real estate pricing
• Economy of the United States
• Housing insecurity in the United States
• Eviction in the United States
• Poverty in the United States
• Homelessness in the United States

{{notelist|refs=

{{efn|name=fn1|{{Wikisource-inline|Shelley v. Kraemer|Shelley v. Kraemer}}; {{Caselaw source |case=Shelley v. Kraemer, {{ussc|334|1|1948|el=no}} |courtlistener=https://www.courtlistener.com/opinion/104545/shelley-v-kraemer/ |justia=https://supreme.justia.com/cases/federal/us/334/1/ |loc=http://cdn.loc.gov/service/ll/usrep/usrep334/usrep334001/usrep334001.pdf |oyez=https://www.oyez.org/cases/1940-1955/334us1 |other_source1=WorldLII |other_url1=http://www.worldlii.org/us/cases/federal/USSC/1948/63.html}}}}

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{{Reflist}}

• Kwak, Nancy H. A World of Homeowners: American Power and the Politics of Housing Aid ( University of Chicago Press, 2015). 328 pp.
• Thurston, Chloe N. (2018). At the Boundaries of Homeownership: Credit, Discrimination, and the American State. Cambridge University Press.

• [https://www.census.gov/housing/hvs/ U.S. Census Bureau's Housing Vacancy Survey]

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{{Demographics of the United States}}

{{United States topics}}

{{Real estate}}

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Category:Wealth in the United States

Category:Economy of the United States

Category:Housing in the United States

Category:Ownership