Homeownership (was What did the Anti-War Movement Lead To?)

[hoov]

> Doug,
> >In the U.S., homeownership rates declined in the 1980s, from a peak of
> >65.8% in the third quarter of 1979, to bottom out at 63.7% in 1990. They've
> >since risen to 65.9% in the first quarter of 98, a hair under the 66.0%
> >record of the third quarter of 1997. 
>
> And what's the proportion of those 'homeowners' who _truly own_ their
> homes, as opposed to still making monthly mortgage payments?
> Yoshie

good question given long-term (30 year) mortgage loans...'creative'
financing introduced since the 80s has made for variable length
loans (some as low as 15 years) but they require higher down payments 
and may include balloon payments and the like...and while, in theory,
stable home prices and lower mortgages rates are supposed to help
folks in purchasing a house, the greatest activity in recent years
has been the refinancing of existing mortgages...

there was a dramatic increase in the % of households purchasing
homes between the early 1940s and the early 1970s - from about
40% to almost 65% (where it has more or less stayed for over
2 decades)...this increase was facilitated by federal government
programs to insure mortgages, insure depositor's savings, and the
use of low-down payment/long-term FHA & VA loans...

of course, programs giving mortgage help for 'middle-strata'
housing were primarily transactions involving private lending
institutions, private housing developers, and private construction
contractors...moreover, FHA loans to non-whites were prohibited 
until 1962 and loans for new single-dwelling units were favored
over loans for existing housing stock or units in multi-housing 
buildings...thus did the federal government contribute to the
existing pattern of racial separation in housing and to suburban
sprawl...

the federal government's criterion for reasonable cost is that rent/
mortgage payments should not exceed 30% of a household's income...
but over 50% of low-income people pay more than half their income
for shelter...and as the number of low-income renters grew in the
1970s & 1980s, the number of 'affordable' rental units declined...

for moderate-income people, the single biggest factor in
purchasing a home is the monthly mortgage payment they will
have to make...this payment is a function of 3 factors: the
price of a home itself, property taxes on the dwelling, and
the interest rate on a mortgage...among the factors contributing
to rising new home prices is the fact that new single-dwelling
homes are seldom designed any more for moderate incomes...in
1970, the average new house had 1500 sq. ft. of living space,
by 1990 the average square footage had grown to 2,080...

the cost of new housing has even driven some relatively affluent
folks back into the 'used home' market driving up prices in
existing stock...Michael Hoover