By Martha Fedorowicz, How Housing Matters, October 9, 2019
Until the 1940s, buying a home was nearly impossible for all but the most affluent households. Following World War II, the federal government was eager to support soldiers returning from the front, so it introduced policies that opened the door to 15- and, eventually, 30-year mortgages, mortgage insurance to reduce downpayments, tax incentives for homeowners, and additional homebuying subsidies for veterans. “Returning soldiers lined up and bought new homes by the millions. In the years immediately following World War II, veterans’ mortgages accounted for over 40 percent of all home loans,” wrote Matt Desmond.
And thus evolved access to the American Dream. No longer limited to financial and business success, more Americans now had the capital to purchase a home of their own. As a result of these policies, the homeownership rate increased dramatically, peaking at 69.2 percent in 2004. It then began a steady decline just before the Great Recession. Today, the homeownership rate rests at 64.1 percent (PDF).
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