A Note by Kyle Laird
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Since the real estate market collapse of 2008-2009, the American housing market has seen a plethora of changes.[1] Cost of living has skyrocketed, making the American Dream unattainable for many.[2] Cost of living has risen for a multitude of reasons, including high interest rates, housing price influxes, and new market competitors.[3] Homeownership is essential for building wealth and a retirement: families can build equity through the gradual price increase, tax deduction incentives, and capital gains exclusions on sales, setting up generational wealth.[4] Further, home equity is often the largest component of net worth, a great incentive to fostering financial growth.[5] The American home ownership rate has decreased since its peak in 2004 and has hovered around sixty-five percent since.[6] Congress has made attempts to spark a resurgence, but it has struggled finding the right balance in handling it.
[1] See Michele Lerner, 10 years later: How the housing market has changed since the crash, The Wash. Post, (Oct. 4, 2018).
[2] See Daniel De Visé, ‘Why is it so hard to make it in America?’ Here’s the true cost of the American Dream, USA Today, (May 5, 2024), https://www.usatoday.com/story/money/2024/05/05/cost-to-live-american-dream/73543082007/.
[3] See id.
[4] Jim Probasco, Homeownership as an Investment, Investopedia, https://www.investopedia.com/articles/mortgages-real-estate/08/home-ownership.asp (last updated Mar. 26, 2022).
[5] See Laurie Goodman and Christopher Mayer, Homeownership and the American Dream, 32 J. of Econ. Perspectives 31 (2018).
[6] U.S. Census Bureau, Homeownership Rate in the United States, Fed. Rsrv. Bank of St. Louis, https://fred.stlouisfed.org/series/RHORUSQ156N (last visited Apr. 30, 2024).