At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.
Did you know that homeownership in the U.S. has its very own month to honor it? Signifying the central importance that owning a home has in the collective American psyche, the month of June was dedicated to promoting the trend of owning homes many decades ago.
Dubbed National Homeownership Month, the yearly tradition might resonate with your own journey toward owning a home.
Whether you’ve already bought a home in your lifetime or aspire to in the future, the deep longing to find the perfect house in a welcoming community is something we can universally relate to. Achieving homeownership has long been considered foundational to The American Dream.
Let’s take a closer look at what goes into National Homeownership Month and all that it signifies. While we recognize the celebratory side of this month-long event, we’d be remiss to neglect the stark reality that homeownership in America has never been (and still is not) an equal opportunity for all Americans.
For that reason, we also examine the racial and economic disparities of homeownership in America that must be acknowledged alongside progress made.
What is National Homeownership Month?
In a nutshell, National Homeownership Month is a time set aside to celebrate the ways that homeownership benefits individuals, families, and communities in America.
Although it’s gone through many iterations over the years, the tradition first began during the economic boom of the Roaring Twenties following the end of World War I when there was a sudden burst of societal growth and optimism. People embraced peace-time and having enough wealth to buy property and settle down with family.
The tide of events quickly changed as it would continue to do throughout the decades of the 20th century to the present. However, the notion of setting aside time to acknowledge a shared vision for success persisted. Here’s how the tradition evolved:
- 1920: Local Realtor® groups wanting to promote the idea of homeownership create the first week-long celebration.
- 1956: The National Association of Realtors® memorializes the celebration on a nationwide scale, thereby incorporating it into the ethos of The American Dream.
- 1976: U.S. Congress issues a joint resolution designating the week beginning on April 18 as Private Property Week, renaming the tradition.
- 1986: The celebration was then renamed again, this time as American Home Week.
- 1995: National Homeownership Week was established by the Clinton administration to increase homeownership rates.
- 2002: President George W. Bush expands the observance to the entire month of June.
- 2016: USDA uses the celebration to highlight the agency’s role in helping people buy homes in rural areas.
- 2021: With the backdrop of economic pain brought on by the coronavirus pandemic, President Joe Biden vows to expand stability and equal opportunity in the housing market.
- 2022: HUD initially calls 2022 a year of momentum for the nation’s homebuyers, but the 30-year fixed mortgage rate jumps from 3.11% in January to a high of 7.08% in November.
- 2023: A historic number of affordable, multifamily units are under construction. The Biden administration includes $175 billion in the fiscal year budget to help build on this progress.
Few people become a homeowner entirely on their own. Instead, we depend on an ecosystem of real estate professionals along with public and private institutions to buy and sell property. For this reason, National Homeownership Month is also a time to honor the contributions of those who work in the industry.
Here are some examples of groups that facilitate homeownership:
- U.S. Department of Housing and Urban Development
- Federal Housing Administration
- Housing assistance programs
- Financial and housing counselors
- National Association of Realtors®
- Licensed real estate agents
- Home builders and contractors
- Mortgage lenders and title companies
- U.S. Department of Agriculture
- State and local government housing agencies
- Nonprofits that offer first-time homebuying classes
- Real estate listing platforms
- Lumber and steel suppliers
- Modular home factories
Why does homeownership matter?
Homeownership carries both cultural and financial weight in U.S. society. So much so, that the concept of The American Dream has become closely associated with homeownership even if it wasn’t originally intended to be synonymous.
For these reasons, homeownership has in a way become a right of passage between young adulthood and full-fledged adulthood as it often coincides with finding employment, finishing higher education, and investing hard-earned savings.
For some, it’s timed closely to marriage and starting a family. Others buy homes with parents, friends, other relatives, with a partner, or as individual owners. Single individuals — particularly women — are strong participants in the real estate market today. Homeownership tends to be evocative of settling down in a place and growing roots in a community.
How has homeownership changed over the years?
The following chart illustrates how homeownership rates have overall ticked up a bit over the decades, even though the price barrier to ownership has steadily risen as well.
|Year||Homeownership Rate||Average Home Cost|
The 2023 homeownership rate is currently 66.0%.
Source: U.S. Census Bureau, Federal Reserve Bank of St. Louis and Reference
One of the primary reasons why rates have increased despite soaring costs is that the mortgage process was changed to allow people to borrow more money to afford homeownership.
Although the concept of mortgages has been around for decades, it wasn’t until after the Great Depression that the process took a consumer focus. As part of President Franklin D. Roosevelt’s New Deal, the Federal Housing Administration was created, which, among other things, created the 30-year mortgage standard.
Interestingly, with the pace of housing inflation accelerating even more since the pandemic, there’s now talk of extending mortgage loan repayment schedules beyond 30 years. It’s part of a push to boost housing affordability to create homeownership opportunities for those with lower incomes.
Housing discrimination plagues The American Dream
For many Americans, The American Dream of homeownership was deliberately derailed or placed beyond their reach through generations of racist policies and practices inflicted against them since the days of slavery and beyond. The government, real estate agents, landlords, and financial institutions systematically discriminated against black homeowners and other minorities through unethical practices such as “steering” and “redlining,” among others.
What is steering in real estate?
Steering is when a real estate agent, landlord, landowner, or anyone in the industry applies pressure or influences a homebuyer to purchase property in certain communities — or “steers” them away from certain communities — based on their race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin.
Here are a few examples of ways steering might look:
- An agent refuses to show qualified candidates listings in certain neighborhoods
- An agent shows more listings to white buyers and limits options for minority buyers
- An agent dissuades white clients from purchasing a home in minority communities
- An agent assumes their buyer would not want to live among people of a different race
- An agent only shows clients homes in neighborhoods where the agent thinks they “fit in”
- An agent speaks disparagingly about a neighborhood of a certain race or religion
- An agent brings up crime concerns to white homebuyers, but not for minority buyers
Steering caused horrific racial disparities for minorities over many years, especially Black Americans who were equally qualified but guided away from desirable neighborhoods and into disadvantaged neighborhoods with higher poverty levels and homes with less appreciation and lower home values.
What is redlining?
The Federal Reserve defines redlining as “the practice of denying a creditworthy applicant a loan for housing in a certain neighborhood even though the applicant may otherwise be eligible for the loan.”
The term is derived from the practice of mortgage lenders drawing red lines — figuratively or literally — around portions of a map to mark neighborhoods or areas where they would reject approval of home loans based on race or ethnicity.
Redlining was especially repressive and destructive for people of color who were denied the opportunity to build a better life for themselves and their families through homeownership.
The practice, which is now illegal, created egregious racial disparities in employment, education, health, and wealth, especially for Black families.
Racially restrictive covenants in deeds also kept Black families from moving out of redlined neighborhoods. Even Black soldiers returning from serving in World War II were rejected by lenders.
In addition, the Urban renewal policies in the 1950s allowed the government to strip underprivileged families of their property to build federally-funded highways, civic centers, and office buildings. The homes and businesses of many Black families were seized and torn down, forcing many of them to start over.
Damage to the dream continues
Additional restrictions combined against Black families and other people of color to exacerbate racial inequities in housing. Some of these included:
- Racially crafted zoning laws segregating by wealth, income, or through lot or home sizes
- Governments prohibiting low-cost housing options where they were needed
- Predatory mortgages and refinancing programs targeting people of color
Steering, redlining, and other discriminatory policies have been made illegal through a number of anti-discrimination and harassment laws. These include:
- Fair Housing Act of 1968,
- Equal Credit Opportunity Act (ECOA) of 1974
- Community Reinvestment Act of 1977
- Creation of the Consumer Financial Protection Bureau (CFPB) in 2011
- Local governments enacting ordinances that prohibit housing discrimination
Despite these efforts, racial discrimination continues to be a serious problem in many parts of the U.S. These discriminatory practices continue to widen the homeownership gap and impact many Americans.
One example of an ongoing racially discriminatory housing practice is biased real estate appraising against people of color, which recently gained more national attention after a report by the New York Times. According to data from the Brookings Institution, minorities who have experienced this bias suffered the equivalent of $48,000 per home in their property valuations.
In March 2022, the Biden-Harris administration released an action plan to address racial and ethnic bias in home valuations.
“Homeownership is the primary contributor to wealth building for Black and brown households and continues to hold promise for building multigenerational wealth and housing stability for households of color,” the Whitehouse action plan reads. “But, bias in home valuations limits the ability of Black and brown families to enjoy the financial returns associated with homeownership, thereby contributing to the already sprawling racial wealth gap.”
In a proclamation recognizing National Homeownership Month, 2023, President Biden states: “I have often said that the middle class is not just a number — it is a value set. It is about the issues that matter to every American family: a good education; economic opportunity; and access to quality, affordable health care. Having a safe, decent, and affordable place to call home is a key part of that.”
How many homeowners are there in the U.S. today?
In addition to creating economic hardships for many, the pandemic also seems to have spurred the number of homeowners in the U.S. According to Census Bureau data, in the first quarter of 2023, there were over 82 million owner-occupied households in the U.S. For comparison, there were about 47 million in 1975.
But the nation’s homeownership rate is under two-thirds of the total population, according to PolicyAdvice, and drops down to one-third for Americans under 34. This is a far cry from Romania, the country with the highest homeownership rate of 96.4%.
Our country’s lower homeownership rate is not without consequences. With the average cost of rent increasing by more than 60% over the last 50 years, more people in the U.S. are putting a greater share of their income toward housing costs without gaining the equity that would come with ownership.
Homeownership rates in the U.S. are also not even among demographics. Due to lingering effects of the discriminatory practices described above, the black homeownership rate in America is only 43.4%, which is lower than it was a decade ago and lags 30 percentage points behind the White homeownership rate, according to a CNN Business report. The Hispanic homeownership rate stands at 50%; the Asian rate; at 61.7%.
What is the average age of first-time homebuyers in the U.S.?
Approximately 70% of Americans aged 24 to 32 who bought a home in 2022 were first-home buyers, whereas 46% of home buyers between 33 and 42 bought their first home in that year, according to a June 2023 Statista Research Department report.
According to census data, the average homeowner is 56 years old, with the highest rate of ownership going to the 65 to 70 age group at 78.6%. The data also shows that homeowners are getting progressively older with the median age increasing by 11.8% since 2003.
How do people observe National Homeownership Month?
Although National Homeownership Month isn’t necessarily an occasion that people set aside time to celebrate, it is on the radar among those who work in the real estate industry and in public policy. Since June is a popular month to buy or sell a home, the timing aligns as a suitable time to contemplate and commemorate the accomplishment of owning a home.
A big part of this could be recognizing one’s own efforts in achieving homeownership. It could also mean helping family and friends with similar aspirations to reach their housing goals by offering advice on lessons learned through the process or even offering a monetary gift toward a down payment.
Additionally, the American Property Owners Alliance recognizes National Homeownership Month by inviting people to share stories about their homebuying journeys as well as experiences and memories that have been created in a home.
It could be as simple as reflecting on the sense of community developed by being settled in a home such as getting together with neighbors for block parties or potluck dinners. It could also be appreciating having extra space to pursue hobbies, enjoy pets, or even the joy of embarking on home improvement projects.
Real estate industry professionals can also mark the special month by hosting a free homebuying seminar or volunteering for a community organization like Habitat for Humanity, which builds homes for those who need them the most.
States, cities, towns, and counties can recognize National Homeownership Month by making proclamations and creating educational campaigns. Local governments can also play a role in helping root out discriminatory housing practices and take action to meet the growing demand for stable, affordable housing for everyone.
What does the future of homeownership look like?
With rising interest rates and home values, some might view future homeownership prospects as bleak. Although the rate of population growth has outpaced new home construction for the past 20 years in the U.S., the tide may be slowly turning in a more favorable direction for homebuyers. The expectation is that higher interest rates will cool demand and create a more balanced market than the one seen in the past two years since the pandemic.
Even in a challenging market environment, help is out there in the form of:
- Down payment assistance programs
- Experienced real estate agents who can help you find the best deals in town
- Credit rebuilding opportunities
- Cash-backed offer programs that help to strengthen offers coming from financed buyers
Prospective homebuyers who are currently priced out of the market can also consider a rent-to-own program. Such programs create a pathway to homeownership for those whose credit scores are less than stellar or who can’t seem to save up enough for a downpayment to keep pace with escalating property values and general inflation.
In general, these programs allow home buyers to rent a desired property for a year and then have the option to purchase if they’re ready. That said, there can be cons to rent-to-own programs, so it’s important to do your research and talk to an advisor before making any arrangements.
What’s my home worth now?
Even if you’re not a prospective buyer or a newly minted homeowner, you can still bask in the feeling of accomplishment, having found and settled into a home that’s right for you. One way to celebrate a little is to use HomeLight’s Home Value Estimator to find your property’s current ballpark value. This could give you a better sense of your future homeownership trajectory.
Fostering, celebrating, and critically examining National Homeownership Month
National Homeownership Month has a long history and has meant different things over the years. Similarly, the occasion might mean something different for you than your neighbor based on your unique homeownership journeys.
When commemorating the achievement of owning a home, it’s important to remember that access to homeownership in America has strongly favored white individuals and that there is much work to be done in correcting deep-seated disparities.
A key element of National Homeownership Month is the community-building aspect that homeownership can provide. In that spirit, as they say, “a rising tide lifts all boats,” so too does fostering equal housing equity uplift everyone in a community.
HomeLight Editor Richard Haddad contributed to this story.
Header Image Source: (karamysh / Shutterstock)