US Homeownership rate at its lowest point in 20 years

Whilst we may be complaining against the Nigerian government and economy in respect to the huge housing deficit we currently have in the nation, it should be of interest to you that the grass is not greener on the other side of the world. Even Americans have their fair share of housing Problems.

According to the The Guardian, many people in the US have given up on the American dream of owning a house: US homeownership rates have now dropped to the lowest point in almost 20 years. But the government shouldn’t be focusing on trying to raise that rate – for now, their priorities should lie with increasing affordable housing.

For too long, well-off, high-income homeowners have benefited from generous government support. All the while, ordinary Americans are struggling to pay the rising rent. It is time to stop prioritizing home sales – increasingly out of reach for many Americans – and help everyday people attain a much more basic, and pressing need: affordable housing.

Since the Great Depression, US housing policies have aimed almost exclusively at encouraging Americans to become homeowners. Housing policies favor and heavily subsidize homeownership because it is said to help create strong communities and build family wealth. But it would be a mistake to continue with this approach now.

Homeowners receive tax benefits for their housing expenses, mostly because of the enormously expensive mortgage interest deductions, which disproportionately benefits higher-income taxpayers. But no such support is offered to lower-income renters.

The government should consider introducing housing tax credits or other tax benefits that would help those who are struggling to pay the rent. The federal government should also consider providing tax subsidies for land trusts or shared equity plans that help renters become homeowners but share the home’s appreciation with a third-party.

The old have policies have failed; we need to try a new approach. Though housing policies succeeded in encouraging renters to buy homes until the 1990s, homeownership has now become unaffordable for lower- and middle-income Americans largely because they do not have savings, and they have unstable and stagnated income – which has changed little (adjusted for inflation) since 1995.

Because housing sales have been sluggish since the 2007-2009 recession, the US government has repeatedly tried to get people to buy houses, and keep existing homeowners in their houses. Yet programs like Hope for Homeowners program, the Home Affordable Modification Program and the Home Affordable Refinance Program all failed to achieve their goals of preventing owners from losing their homes, largely because of design flaws.

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On a positive note, the housing deficit in Nigeria is a large market of opportunities. Together, we can explore these opportunities to create better lives for ourselves.