The study explored the causes of the rapid rise in homeownership over the past decade. Entities like Fannie Mae and Freddie Mac have focused on helping as many as possible attain the American Dream: home ownership.
After decades of relative stability, the rate of U.S. homeownership began to surge in the mid-1990s, rising from 64% in 1994 to a peak of 69% in 2004, near which it has hovered ever since; this translates into 12 million more homeowners over the period (Figure 1). Understanding the forces behind such trends in homeownership is important not only because supporting homeownership has been an unequivocal public policy goal for decades but also because homes are an important part of people’s net worth and, therefore, can affect their spending, working, and saving decisions.
The causes of the increase seem to be attributable to a shift in demographics that is favorable to housing and creative financing options favorable to home purchasers. Its interesting because homeownership began to retreat (slightly) from record highs in 2004 as the housing boom peaked.
The housing boom received significant impetus from creative and flexible financing option for buyers. Talk of a down payment changed to a monthly payment. I suspect that these financing options are here to stay in one form or another and the homeownership percentage will remain at or near this new level.