What Is National Homeownership Month?

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.

Source: U.S. Census Bureau, National Association of Realtors®

One primary reason 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 (FHA) was created, which, among other things, created the 30-year mortgage standard.

In March 2023, the FHA announced its final rule that allows lenders to extend mortgage repayment schedules to 480 months (40 years) for distressed homeowners through a loan modification program.

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 pressures 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 to 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.

While steering was made illegal under the 1968 Fair Housing Act, studies and investigations conducted in recent years show that the pervasive practice is still prevalent in the U.S.

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

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 gained national attention following a 2020 New York Times report. Brookings Institution data reveals homes in Black neighborhoods are undervalued by 21%–23% compared to similar homes in non-Black neighborhoods. 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?

High mortgage rates and low inventory levels are putting homeownership further out of reach for many Americans. The homeownership rate dipped to 65.6% in the first quarter of 2024 — 3.6 percentage points lower than the peak rate recorded in 2004. Compared to the same period a year earlier, homeownership rates fell among the under-35 and 35-44 age groups.

In Q1, owner-occupied housing units made up 58.8% of the U.S. housing stock, while renter-occupied units accounted for 30.8% (the remainder are vacant year-round or seasonally).

The nation’s homeownership rate is under two-thirds of the total population and just over one-third (37.7%) for Americans under 35 years of age. This is a far cry from Laos, the country with the highest homeownership rate of 95.9%.

Our country’s lower homeownership rate is not without consequences. With the average cost of rent increasing by 36% over the last five 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 the lingering effects of the discriminatory practices described above, the homeownership rate among Black Americans is only 45.7%, according to Q1 2024 data from the U.S. Census Bureau. While there’s been a slight uptick in recent years, the homeownership rate for this group falls behind White Americans (74%), Hispanic Americans (49.9%), and Asian Americans and Pacific Islanders (62.2%).

What is the average age of first-time homebuyers in the U.S.?

According to data from the National Association of Realtors, in 2023, first-time buyers accounted for 32% of all home buyers, up from 26% in 2022. The median age of first-time homebuyers has risen significantly in recent decades, from 29 in 1981 to 31 in 2013 and reaching 35 in 2023.

Last year, Younger Millennials (aged 25–33) had the highest proportion of first-time homebuyers at 75%, followed by Gen Xers (aged 44–58) at 54%. Older Millennials (aged 34–43) came in third at 44%.

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. Limited inventory is challenging the current market, as homeowners with favorable mortgage rates are reluctant to sell. While higher mortgage rates typically result in lower home prices, the opposite has occurred due to this extreme inventory shortage. As of April 2024, the median sales price of single-family homes has risen 5% year-over-year to $389,400.

A decade of under-building in the U.S. has contributed to a housing shortage of an estimated 3.2 million homes. However, the tides are beginning to turn. In February 2024, completions of new homes jumped nearly 20% to a seasonally adjusted annual rate of 1.729 million units, marking the highest level since January 2007. Increasing supply will help satisfy the demand in the housing market and stabilize prices.

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.

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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 much work remains to correct 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.

Writer Jacob Bourne contributed to this story.

Header Image Source: (karamysh / Shutterstock)