Saving the homeownership ideal

Pundits and economists across the political spectrum are now bemoaning America’s homeownership “fetish.” I understand the pushback. This view of homeownership as a U.S. birthright contributed to the housing bubble, which, when it burst, exacerbated the financial crisis.

But homeownership ought to remain an American ideal. And if America can recommit to its core values, it will.

Housing statistics now paint a bleak picture. New home completions fell 9.5 percent in January, to an all-time low of 512,000 units. This followed the worst year for new home sales in nearly a half-century. A quarter of homeowners remain underwater — meaning they owe more on their mortgages than their homes were worth. Home values have fallen 26 percent since the June 2006 peak, according to Zillow, the real estate publication, worse than the 25.9 percent decline during the Great Depression.

Until recently, the federal government’s attitude toward homeownership reflected President Franklin D. Roosevelt’s declaration that a nation of homeowners was “unconquerable.”

The Homestead Act of 1862 granted applicants freehold title to up to 160 acres of undeveloped federal land outside the original 13 Colonies. The National Housing and Community Reinvestment Act encouraged homeownership for Americans with middle and low incomes. Americans have always been encouraged to own land and homes.

It’s no wonder why. Homeownership brings a host of benefits. It promotes saving because with each mortgage payment, the borrower increases equity in his or her home. Studies show that homeowners are more invested in their communities, devote more resources to the upkeep of their homes and property and care more about what happens in their neighborhoods.

Homeowners are more likely to vote. Their children are less likely to quit school or get into trouble. In one study, the homeownership rate was the second most powerful variable — after income — in explaining differences in crime rates throughout New York City.

Whether homeownership creates better citizens or vice versa is debatable. What’s clear, however, is that it makes for better citizenship.
Read more:


This entry was posted in Home Building,, Real Estate. Bookmark the permalink.

Comments are closed.