The U.S. homeownership rate fell again in the fourth quarter of 2014 to its lowest point in over two decades. The latest 63.9 percent ownership rate is down from the bubble peak rate of 69.4 percent. A further drop is likely this year before finally settling down in the upcoming years.
“4th Quarter Homeownership Rate of 2014,” Realtor.org
Homeownership Programs = Total Failure
We’ve seen an unending string of programs to boost homeownership.
They’ve failed spectacularly if you judge their success by their stated idealistic goal of increasing homeownership in the United States. Clearly they’ve been a massive failure using their own homeownership goal.
However, they have been spectacularly successful if you take a more realistic, political view of their goals. The programs have pumped billions of dollars into housing organizations and despite their terrible track record on homeownership the money continues to flow because the real goal is to simply fund the housing organizations.
Best Explanation of Banking/Housing Crisis
Columbia economics professor Charles Calomiris’ book, “Fragile by Design,” does a great job of explaining the political bargain that created this fragile banking system that has led to tremendous home price instability that has decimated the net worth of low and moderate income homeowners.
The current system promoting U.S. homeownership has been responsible for wiping out the net worth of many low and moderate income families.
How would you have liked to have scrimped and saved for years on low wages to buy your family a home and then to have the home lose 80% of its value in the real estate bust?
2 Responses to U.S. homeownership rate lowest since 1994 and headed down
Loved this presentation. Reading between the lines it helped me understand how an unknown political organizer from Illinois could ascend to the presidency via the power of political activism. Another between the lines ah ha had to do with the power of the English Monarch given the stability economies of Hong Kong, New Zealand, Australia & Canada, all heavily influenced or controlled by the British Crown at one time or another. Thanks John!
Yeah Mark, that guy has the clearest explanation of the bubble that I’ve seen. Basically, liberals and conservatives agreed to dangerously weakening banking and mortgage lending requirements because the weakened system would allow the banks and the housing organizations to both make a lot more money. That was good for those organizations, of course, but also for the politicians those organizations supported.
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