The homeownership rate in the U.S. fell in the first quarter of 2011 to 66.4%, according to data released today by the Census Bureau. That was the lowest homeownership rate in slightly more than 12 years, since the 66.4% rate in the fourth quarter of 1998, and it looks like it will probably continue to fall in the coming years.
Conclusion: The political obsession with homeownership raised homeownership in the short run to an artificial and unsustainable level of 69% by 2006, but failed in the long run to stimulate homeownership at a sustainable level, and in the process government policy turned good renters into bad homeowners, created a housing bubble, waves of foreclosures, and a subsequent housing meltdown and financial crisis. In other words, the chart illustrates how government policies (monetary, mortgage market, GSEs, CRA, affordable housing, etc.) created an unsustainable "homeownership bubble." (Continue to article)
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