Homeownership in the United States - AbsoluteAstronomy.com

The homeownership rate in the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

in 2009 remained similar to that in other post-industrial nations with 67.4% of all occupied housing units being occupied by the unit's owner. Home ownership rates vary depending on demographic characteristics of households such as ethnicity, race, type of household as well as location and type of settlement.

Since 1960, the homeownership rate in the United States has remained relatively stable having increased 5.6% since 1960 when 62.1% of American households owned their own home. However, homeowner equity has fallen steadily since World War II

World War II

World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...

and is now less than 50% of the value of homes on average. Homeownership was most common in rural areas and suburbs with three quarters of suburban households being homeowners. Among the country's regions the Midwestern states

Midwestern United States

The Midwestern United States is one of the four U.S. geographic regions defined by the United States Census Bureau, providing an official definition of the American Midwest....

had the highest homeownership rate with the Western states

Western United States

.The Western United States, commonly referred to as the American West or simply "the West," traditionally refers to the region comprising the westernmost states of the United States. Because the U.S. expanded westward after its founding, the meaning of the West has evolved over time...

having the lowest.

Homeowners in the United States also tend to have higher incomes

Household income in the United States

Household income is a measure commonly used by the United States government and private institutions, that counts the income of all residents over the age of 18 in each household, including not only all wages and salaries, but such items as unemployment insurance, disability payments, child support...

and households residing in their own home were more likely to be families (as opposed to individuals) than were their tenant counterparts. Among racial demographics, European American

European American

A European American is a citizen or resident of the United States who has origins in any of the original peoples of Europe...

s had the country's highest homeownership rate, while those identifying as being African American had the lowest homeownership rate.

The name "homeownership rate" can be misleading. As defined by the US Census Bureau, it is the percentage of homes that are occupied by the owner. It is not the percentage of adults that own their own home. This latter percentage will be significantly lower than the homeownership rate because many households that are owner-occupied contain adult relatives (often young adults, descendents of the owner) who do not own their own home, and because single building multi-bedroom rental units can contain more than one adult, all of whom do not own a home.

Method

In the US, the homeownership rate is created through the Housing Vacancy Survey by the US 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 homeownership rate over time. The bust of the housing bubble

United States housing bubble

The United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and may not yet have hit bottom as of 2011. On December 30, 2008 the...

resulted in many houses becoming foreclosed. However, the decrease in the homeownership 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.

Government policy

Home ownership has been promoted as government policy using several means involving mortgage debt. The existence of the government sponsored entities: Freddie Mac, Fannie Mae, and the Federal Home Loan Banks

Federal Home Loan Banks

The Federal Home Loan Banks are 12 U.S. government-sponsored banks that provide stable, on-demand, low-cost funding to American financial institutions for home mortgage loans, small business, rural, agricultural, and economic development lending...

fund or guarantee $6.5 trillion of assets with the purpose of directly or indirectly promoting home ownership. Home ownership has been further promoted through tax policy which allows a tax deduction for mortgage interest payments on a primary residence

Primary residence

A person's primary residence is the dwelling where they usually live, typically a house or an apartment. A person can only have one primary residence at any given time, though they may share the residence with other people...

. The Community Reinvestment Act

Community Reinvestment Act

The Community Reinvestment Act is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods...

also encourages home ownership for low-income earners. Because home ownership has been promoted by the government through encouraging mortgage borrowing and lending, this has given rise to debates regarding government policies and the subprime mortgage crisis

Government policies and the subprime mortgage crisis

Both deregulation, and excess regulation, of financial institutions have been blamed for the late-2000s subprime mortgage crisis in the United States....

Race

Homeownership rate, as well as the fluctuations within it, varied significantly with race. While homeowners constitutes the majority of White

White American

White Americans are people of the United States who are considered or consider themselves White. The United States Census Bureau defines White people as those "having origins in any of the original peoples of Europe, the Middle East, or North Africa...

, Asian

Asian American

Asian Americans are Americans of Asian descent. The U.S. Census Bureau definition of Asians as "Asian” refers to a person having origins in any of the original peoples of the Far East, Southeast Asia, or the Indian subcontinent, including, for example, Cambodia, China, India, Indonesia, Japan,...

and Native American

Native Americans in the United States

Native Americans in the United States are the indigenous peoples in North America within the boundaries of the present-day continental United States, parts of Alaska, and the island state of Hawaii. They are composed of numerous, distinct tribes, states, and ethnic groups, many of which survive as...

households, the homeownership rate for African American

African American

African Americans are citizens or residents of the United States who have at least partial ancestry from any of the native populations of Sub-Saharan Africa and are the direct descendants of enslaved Africans within the boundaries of the present United States...

s and those identifying as Hispanic or Latino fell short of the fifty percent threshold. Whites had the highest homeownership rate, followed by Asians

Asian American

and Native Americans

Native Americans in the United States

.

As of 2009, African American

African American

s had once again the lowest homeownership rate in the country. Hispanics had the lowest homeownership rate in the country in all years, except for 2002, up until 2005. Since then the homeownership rate for Hispanics has exceeded that of African American

African American

s. Chronicle fluctuations were slight however for all races, commonly not changing more than two percentage points per year.

The strongest increase in the percentage of homeowners was among non-White minorities. The homeownership for minorities approached the sixty percent mark in 2006, which was a significant achievement 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 has fallen since the 2006 peak, consistent with overall homeownership rates.

The increase among White American

White American

s was less substantial. In 2005, 75.8% of White American

White American

s owned their own homes, compared to 70% in 1993, and has been falling since, at a rate slightly lower than 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 is now slightly widening again.

6.86%
Race	1994	1995	1996	1997	1998	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009
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
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
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
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
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

SOURCE: US Census Bureau, 2009

Type of household

There is a strong correlation between a household's family structure, type as well as the age of and homeownership. Overall married couple families, which also have the highest median income

Household income in the United States

of any household type, were most likely to own a home, while female singles, who had the lowest median income

Household income in the United States

of any household type were least 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 household under the age of thirty-five owned a home, 81.6% of those with a householder between the ages of 55 and 64 did.

This means that households with a middle-aged

Baby boomer

A baby boomer is a person who was born during the demographic Post-World War II baby boom and who grew up during the period between 1946 and 1964. The term "baby boomer" is sometimes used in a cultural context. Therefore, it is impossible to achieve broad consensus of a precise definition, even...

householder were nearly twice as likely to own a home as those with a young householder. Overall married couple families

Census family

In the Canada Census such families consisting of a married couple and children are referred to as Census Families. The US Census Bureau refers to such household structures as "Married couple families." This demographic features the highest median household income in the United States."Census...

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.

Income

There are considerable correlations between income

Income in the United States

Income in the United States is measured by the United States Department of Commerce either by household or individual. The differences between household and personal income is considerable since 42% of households, the majority of those in the top two quintiles with incomes exceeding $57,658, now...

, homeownership rate and housing characteristics. As income is closely linked to social status, sociologist

Sociology

Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

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

Real estate pricing

Real estate pricing deals with the valuation of real estate and all the standard methods of determining the price of fixed assets apply....

was $112,000, while the median size was 1700 square feet (157.9 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.

Among homeowners with household incomes

Household income in the United States

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.

Historical

Year	Home ownership rate,
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

International Comparison

Country	Austria Austria Austria , officially the Republic of Austria , is a landlocked country of roughly 8.4 million people in Central Europe. It is bordered by the Czech Republic and Germany to the north, Slovakia and Hungary to the east, Slovenia and Italy to the south, and Switzerland and Liechtenstein to the...	Belgium Belgium Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...	Denmark Denmark Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...	France France The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...	Germany Germany Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...	Ireland Ireland Ireland is an island to the northwest of continental Europe. It is the third-largest island in Europe and the twentieth-largest island on Earth...	Norway Norway Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...	Spain Spain Spain , officially the Kingdom of Spain languages]] under the European Charter for Regional or Minority Languages. In each of these, Spain's official name is as follows:;;;;;;), is a country and member state of the European Union located in southwestern Europe on the Iberian Peninsula...	Portugal Portugal Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...	UK United Kingdom The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...	US United States The United States of America is a federal constitutional republic comprising fifty states and a federal district...	Slovenia Slovenia Slovenia , officially the Republic of Slovenia , is a country in Central and Southeastern Europe touching the Alps and bordering the Mediterranean. Slovenia borders Italy to the west, Croatia to the south and east, Hungary to the northeast, and Austria to the north, and also has a small portion of...	Israel Israel The State of Israel is a parliamentary republic located in the Middle East, along the eastern shore of the Mediterranean Sea...	Canada Canada Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
Home ownership rate	56%	71%	51%	55%	42%	77%	77%	85%	64%	69%	68%	82%	71%	67%

External links

U.S. Census Bureau's Housing Vacancy Survey
The Homeownership Myth article in Dollars & Sense
Dollars & Sense
Dollars & Sense is a magazine dedicated to providing left-wing perspectives on economics.Published six times a year since 1974, it is edited by a collective of economists, journalists, and activists committed to the ideals of social justice and economic democracy.It was initially sponsored by the...

magazine, accessed May 30, 2007
Homeownership and Debt Information Service provider

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.

Method

Government policy

Race

Type of household

Income

Historical

International Comparison

See also

External links