Homeownership in the United States
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The
Since 1960, the homeownership rate in the United States has remained relatively stable. It has decreased 1.0% since 1960, when 65.2% of American households owned their own home. Additionally, homeowner equity has fallen steadily since
In general, homeowners in the United States also tend to have higher incomes. Households residing in their own home were more likely to be families (as opposed to individuals) than were their tenant counterparts.[8] Among racial demographics, White Americans had the country's highest homeownership rate, while African Americans had the lowest homeownership rate. One study shows that homeownership rates appear correlated with higher education attainment.[9]
The name "homeownership rate" can be misleading. As defined by the
The term "homeownership rate" can also be misleading because it includes households that owe on a mortgage. Which means that they do not fully own the equity in their own home, which they are said to "own". According to ATTOM Data Research, only "34 percent of all American homeowners have 100 percent equity in their properties — they’ve either paid off their entire mortgage debt or they never had a mortgage".[10]
According to CNBC, the median sale price for a U.S. home in 2017 was US$199,200.[11] By February 2023, the median sale price increased to US$392,000 according to Statista.[12] The growing U.S. housing shortage is a major factor in home prices increasing so rapidly.[13][14]
Measuring method
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
Government policy
Homeownership has been promoted as government policy using several means involving mortgage debt and the
Race
The homeownership rate, as well as its change over time, has varied significantly by race.
Although a landmark
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
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.[16]
The increase among
Race | 1994 | 1995 | 1996 | 1997 | 1998 | 1999 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | % change
since '94 |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
White (non-Hispanic) | 70.0 | 70.9 | 71.7 | 72.0 | 72.6 | 73.2 | 73.8 | 74.3 | 74.5 | 75.4 | 76.0 | 75.8 | 75.8 | 75.2 | 75.0 | 74.8 | 74.4 | 73.8 | 73.5 | 73.3 | 72.6 | 71.9 | +2.71% |
Asian American | 51.3 | 50.8 | 50.8 | 52.8 | 52.6 | 53.1 | 52.8 | 53.9 | 54.7 | 56.3 | 59.8 | 60.1 | 60.8 | 60.0 | 59.5 | 59.3 | 58.9 | 58.0 | 56.6 | 57.4 | 57.3 | 56.1 | +9.35% |
Native American | 51.7 | 55.8 | 51.6 | 51.7 | 54.3 | 56.1 | 56.2 | 55.4 | 54.6 | 54.3 | 55.6 | 58.2 | 58.2 | 56.9 | 56.5 | 56.2 | 52.3 | 53.5 | 51.1 | 51.0 | 52.2 | 50.3 | (-2.08%) |
African American | 42.3 | 42.7 | 44.1 | 44.8 | 45.6 | 46.3 | 47.2 | 47.7 | 47.3 | 48.1 | 49.1 | 48.2 | 47.9 | 47.2 | 47.4 | 46.2 | 45.4 | 44.9 | 43.9 | 43.1 | 43.0 | 42.3 | 0.00% |
Hispanic or Latino | 41.2 | 42.1 | 42.8 | 43.3 | 44.7 | 45.5 | 46.3 | 47.3 | 48.2 | 46.7 | 48.1 | 49.5 | 49.7 | 49.7 | 49.1 | 48.4 | 47.5 | 46.9 | 46.1 | 46.1 | 45.4 | 45.6 | +10.68% |
SOURCE: US Census Bureau, 2016[16]
Racism
The data from the United States Census Bureau shows black Americans have the lowest rate of home ownership in the US.[21] 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.[22] 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.[23]
Type of household
There is a strong correlation between the type and age of a household's family structure and homeownership.[24] 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.[24] 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.[25]
This means that households with a
Income
There are considerable correlations between
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.[26]
U.S. home prices are rising significantly faster than incomes. After accounting for inflation, home prices jumped 118% from 1965 to 2021, while income has only increase by 15%.[27] High demand and low supply in most cities will likely continue to keep home prices outpacing income increases.[28] 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.[29]
Wealth accumulation
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.[30] In first quarter 2023, the average American with an active mortgage had a home equity close to US$275,000.[31]
Political influence
Homeownership influences the political participation of individuals, with homeowners more likely to participate in local elections.[32] 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.[33]
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.[33]
Historical
Year | Home ownership rate[36] |
---|---|
1960 | 62.1 |
1961 | 62.4 |
1962 | 63.0 |
1963 | 63.1 |
1964 | 63.1 |
1965 | 63.3 |
1966 | 63.4 |
1967 | 63.6 |
1968 | 63.9 |
1969 | 64.3 |
1970 | 64.2 |
1971 | 64.2 |
1972 | 64.4 |
1973 | 64.5 |
1974 | 64.6 |
1975 | 64.6 |
1976 | 64.7 |
1977 | 64.8 |
1978 | 65.0 |
1979 | 65.6 |
1980 | 65.6 |
1981 | 65.4 |
1982 | 64.8 |
1983 | 64.6 |
1984 | 64.5 |
1985 | 63.9 |
1986 | 63.8 |
1987 | 64.0 |
1988 | 63.8 |
1989 | 63.9 |
1990 | 63.9 |
1991 | 64.1 |
1992 | 64.1 |
1993 | 64.0 |
1994 | 64.0 |
1995 | 64.7 |
1996 | 65.4 |
1997 | 65.7 |
1998 | 66.3 |
1999 | 66.8 |
2000 | 67.4 |
2001 | 67.8 |
2002 | 67.9 |
2003 | 68.3 |
2004 | 69.0 |
2005 | 68.9 |
2006 | 68.8 |
2007 | 68.1 |
2008 | 67.8 |
2009 | 67.4 |
2010 | 66.9 |
2011 | 66.1 |
2012 | 65.4 |
2013 | 65.1 |
2014 | 64.5 |
2015 | 63.7 |
International comparison (2002)
Country | Austria | Belgium | China | Denmark | France | Germany | Ireland | Norway | Spain | Portugal | UK | US | Slovenia | Israel | Canada |
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Home ownership rate[4] | 56% | 71% | 90% | 51% | 55% | 42% | 77% | 77% | 85% | 64% | 69% | 68% | 82% | 71% | 67% |
See also
- 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
Footnotes
- ^ Works related to Shelley v. Kraemer at Wikisource; Text of Shelley v. Kraemer, 334 U.S. 1 (1948) is available from: CourtListener Justia Library of Congress Oyez (oral argument audio) WorldLII
References
- ^ "US Census Bureau, Homeownership by Area". Census.gov. Retrieved January 6, 2010.
- ^ a b "US Census Bureau, Homeownership in the United States, 1960-2004". Census.gov. Retrieved October 5, 2006.
- ^ "What is homeownership rate? definition and meaning". BusinessDictionary.com. Archived from the original on July 23, 2016. Retrieved October 14, 2017.
- ^ a b "EU homeownership rates, 2002" (PDF). Archived from the original (PDF) on June 16, 2007. Retrieved February 15, 2007.
- ^ "QUARTERLY RESIDENTIAL VACANCIES AND HOMEOWNERSHIP, FIRST QUARTER 2018" (PDF). Census.gov. April 26, 2018.
- ^ Federal Reserve report shows homeowner equity dipping below 50 percent, lowest on record, SignOnSanDiego.com, URL accessed 28 December 2008
- ^ "Why Has Home Ownership Fallen Among the Young?" (PDF). Chicagofed.org. Retrieved October 14, 2017.
- ^ "US Census Bureau, distribution of homeowners among the income quitniles". Archived from the original on July 7, 2006. Retrieved October 5, 2006.
- ^ "A Note on the Benefits of Homeownership, Federal Reserve Bank of Chicago" (PDF). Chicagofed.org. Retrieved October 14, 2017.
- ^ "American homeowners are making headway on mortgage debt, report finds". WashingtonPost.com. August 23, 2017. Retrieved July 7, 2019.
- ^ Martin, Emmie (June 23, 2017). "MONEY Here's how much housing prices have skyrocketed over the last 50 years". CNBC. Archived from the original on March 28, 2023. Retrieved April 6, 2023.
- ^ "Median home price in the U.S. 2022 and forecast until 2023".
- ^ "U.S. Housing Shortage: Everything, Everywhere, All at Once | Fannie Mae".
- ^ "The US housing shortage is 'awful' and will likely get worse with no apparent end in sight". USA Today.
- ^ a b "US Census Bureau, homeownership by race". Census.gov. Retrieved October 29, 2017.
- ^ a b c d e f "US Census Bureau, homeownership by race". Retrieved October 29, 2017.
- ^ "Shelley House". We Shall Overcome: Historic Places of the Civil Rights Movement. National Park Service. Retrieved June 11, 2013.
- ^ a b Watt, Nick; Hannah, Jack (February 15, 2020). "Racist language is still woven into home deeds across America. Erasing it isn't easy, and some don't want to". CNN. Archived from the original on October 2, 2020. Retrieved October 15, 2020.
- JSTOR 800457.
- ^ Perry, Andre (December 7, 2018). "Homeowners have lost $156 billion by living in a 'black neighborhood'". Perspectives. CNN Business. Archived from the original on December 31, 2018. Retrieved October 15, 2020.
- ^ Connley, Courtney (August 21, 2020). "Why the homeownership gap between White and Black Americans is larger today than it was over 50 years ago". CNBC.
- ^ "Housing Discrimination Under the Fair Housing Act".
- ^ Bahney, Anna (February 25, 2022). "The Black homeownership rate is now lower than it was a decade ago". CNN.
- ^ a b c d "US Census Bureau, homeownership according to age and type of household". Retrieved October 5, 2006.
- ^ Veronica Dagher and Rachel Wolfe. (22 December 2023). "The Rise of the Forever Renters". The Wall Street Journal website Retrieved 24 December 2023.
- ^ a b Beeghley, Leonard (2004). The Structure of Social Stratification in the United States. Boston, MA: Pearson.
- ^ Dickler, Jessica (November 10, 2021). "Home prices are now rising much faster than incomes, studies show". CNBC. Retrieved March 9, 2023.
- ^ Arnold, Chris; Benincasa, Robert; GaNun, Jaqueline; Chu, Haidee (July 14, 2022). "There's a massive housing shortage across the U.S. Here's how bad it is where you live". Archived from the original on April 4, 2023. Retrieved April 6, 2023.
- ^ "How finding a home in America became so absurdly expensive". The Guardian. May 2023.
- ^ "Rethinking homeownership incentives to improve household financial security and shrink the racial wealth gap".
- ^ "Homeowner Equity Data and Statistics".
- .
- ^ a b Florida, Richard (August 28, 2018). "The Politics of Homeownership". Bloomberg CityLab. Retrieved October 21, 2020.
- ^ "QUARTERLY RESIDENTIAL VACANCIES AND HOMEOWNERSHIP, FOURTH QUARTER 2016" (PDF). Census.gov. Retrieved October 29, 2017.
- ^ "US Census Bureau, Housing Vacancies and Homeownership". Census.gov. Retrieved October 14, 2017.
- ^ "US Census Bureau, homeownership rate by area". Census.gov. Retrieved October 24, 2016.
Further reading
- 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.