Do We Need Federal Involvement to Raise Home Ownership Rates? (Compare ownership rates worldwide)

In Alex Pollock’s testimony last week before the Senate Subcommittee on Security and International Trade and Finance, he provided an interesting international perspective on homeownership rates around the world:

In the days of Fannie and Freddie’s pride, their representatives and political supporters used to frequently say, “American housing finance is the envy of the world!” It really wasn’t, at least based on my discussions with housing finance colleagues from other countries. But many Americans—including members of Congress—thought it was, just as they mistakenly thought and said that the U.S. had the highest home ownership rate in the world. We didn’t and don’t. This is apparent from the International Comparison of Home Ownership Rates below. The U.S. ranks 17th of 26 economically advanced countries, or about two-thirds of the way down the list.

I think we can agree that we would like our society to have a property-owning democratic citizenry, which includes widespread home ownership. But the international perspective makes it clear that many countries achieve home ownership levels as high or higher than ours with no government-sponsored enterprises. It turns out that these levels can be achieved without tax deductions for the interest paid on home mortgages, without our very unusual practice of making mortgages into non-recourse debt, without government mandates to make “creative” (that is, riskier) loans, without 30-year fixed-rate loans, and with prepayment fees on mortgages.
Of course, as bubbles and busts in other countries show, you can also get in trouble with different systems. At a minimum, we should never assume that the particular historical development so far of the U.S. housing finance system is definitive.

The question should be WHY those countries have higher rates of ownership?.

Cheaper real estate? Not really...at least not recently.

Better incomes? Not really...

Lower taxes? In some cases, perhaps...

I don’t know.

The differences are due to the old apples/oranges dichotomy.

The US Census asks if the property is owner occupied. The other data sources indicate if the property is privately owned or publicly owned.

Here's a better one for you. At the height of the Cold War 90% of the land in Poland was in private hands yet 90% of the land in Nederland was government owned.

So, where did the Commies live?

Let’s define HOME OWNERSHIP first.

If you have a mortgage, and you have not paid it off yet, you DON’T OWN YOUR HOME, the bank or credit union owns it.

The question then becomes, HOW DO EACH COUNTRY DEFINE HOME OWNERSHIP?

I would only consider a definition that defines home ownership as -— “I’ve paid off my loan”.

Let’s start with that and make a comparison between countries but not until.

I think that the devil is in the details on this one. Let’s say you own your house in Amsterdam. YOur son & his wife and kids live with you as well as Grandma & Gramps. Everyone has their own floor of the house. ONly you are contributing to the mortgage. How would you count that up? Let’s say you own your own house in Boston - you live on the ground floor of a big old house that you own. You rent out the upper floors of that house to unrelated people. How would you count that? You live in a big apt. building in NYC where you have been a renter all your life. The building “goes condo” - now you have to buy your tiny little space or move out. So, now you are a “homeowner.” How to count that? Geez, I love statistics....

What the bloody point is that affordable single-family housing is not what it used to be — When WW2 was over, our Vets and their “baby boomer” families needed affordable housing that simply did not exist. A huge building boom took place all over our country. People didn’t have to have much or any money to put down- they had jobs- and they paid their mortgages. What changed from then to now? A lot has happened, and the details of what exactly occurred is important to know. Not everyone can or should be a homeowner.

Hey Mark! This has already been tried in the U.S.

Have you not payed attention to Fannie Mae and Freddy Mack?

Have you not yet learned about Bwawney Fwank, Chrissy Dodd, and Maxine Watters, and their involvement with loosening requirements to obtain home loans.

Have you paid no attention to Obozo's cross country organizing before he became a U.S. Senator in order to pressure members of congress into voting to allow those laxed loan requirements?

Were you not paying attention to the warnings issued by President Bush in 2004 that the U.S. economy was in danger because of the changes in restrictions for home loans? Are you not in tuned to the fact that because of the housing market mess created by these individuals and other liberal morons that, not only is the U.S. economy in shambles, but the world economy was negatively impacted just by this one issue?

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