According to data released several weeks ago by the Census Bureau, the U.S. homeownership rate fell to 67.2% in the fourth quarter of 2009, the lowest rate since 67.1% in the first quarter of 2000 almost ten years ago. Compared to the peak of 69.2% in 2004, homeownerhip has fallen by two full percentage points.
Many would agree that he global financial crisis, mortgage tsunami, and housing bubble can all be traced to the political obsession to increase homeownership with easy credit and government housing policies, so in that case the significant decrease in the homeownerhip rate to a ten-year low is probably a good thing. The political infatuation with homeownership turned thousands of good renters into bad homeowners and consequently turned the American dream into the American nightmare. The fact that bad homeowners are now returning to once again being good renters again is a sign of progress.
As Robert Samuelson wrote in Newsweek (August 2008):
“We think everyone should become a homeowner, when many families can’t or shouldn’t. The result is to encourage lending to weak borrowers who are likely to default. The avid pursuit of a few more percentage points on the homeownership rate has condoned enormously damaging policies.”
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