Despite Government’s Encouragement, Rate of Homeownership Remains Steady
The rate of homeownership has not increased to the extent that the author implies in this Post-Dispatch article:
After being relatively flat for much of the ‘80s and ‘90s, homeownership levels climbed several percentage points in the early 2000’s, peaking at 69 percent in 2004, according to the Census Bureau.
This rate for the United States was indeed flat during this period. However, the author does not disclose the fact the rate hovered around a mean of 64.7 percent between 1984 and 2000 — less than 3 percentage points lower than the peak in 2004. The rate increased only 5 points from 1994 and 2004, from 64 to 69 percent.
Additionally, the author restricted the vertical scale of the graph in a way that makes the increase over time seem large. Looking at an unrestricted version of the chart, this increase is not that significant.
I used annual homeownership rates by state and by metropolitan area data from the U.S. Census to produce the following graphs:
Interestingly, the rates of homeownership in the state of Missouri and in the Saint Louis metropolitan area are higher than the rate in the United States. I suspect that this can be attributed to the fact that housing is plentiful and relatively inexpensive in Missouri, and perhaps also to a Midwestern lifestyle that encourages homeownership, among other factors.
Looking at all 50 states, although the homeownership rate for each falls within a range between 50 and 80 percent, there hasn’t been a significant change over time.
Programs that encourage homeownership exist at practically every level in the government. They include: homeownership assistance; property tax relief for new home buyers; homeownership vouchers; housing codes that restrict the number of units in a building; and, the recent federal tax credit for home buyers. However, despite this assistance, it appears that the rate of homeownership remains steady. If it weren’t for these programs, I wonder whether the rate of homeownership would be unaffected or whether it would decrease.