Brief Homeownership Is Affordable Housing
Mike Loftin
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Faced with a shortage of affordable housing, policymakers are failing to take advantage of America’s biggest source of affordable housing: homeownership. Contrary to popular belief, owning one’s own home is frequently more affordable than renting. Nevertheless, many people cling to the idea that homeownership is reserved for people who achieve some arbitrary level of financial success and that it is not “appropriate” for people who are still on their path to financial security. This may help explain why most federal, state, and local efforts to create more affordable housing focus on the rental market. But the data prove this thinking incorrect. This brief reveals how the typical homeowner spends significantly less of their income on housing than the typical renter, a pattern that holds true for low- and very low–income households and across all races and ethnicities. The brief explores why homeownership tends to be so much more affordable than renting, why it becomes even more affordable over time, and the impact of homeownership’s “affordability Big Bang.” The brief closes with a discussion of the need for policymakers to turn more of their attention to homeownership for the nation to make real progress increasing housing affordability.

Research Areas Wealth and financial well-being Housing finance Housing
Tags Asset and debts Housing markets Single-family finance Homeownership Finance
Policy Centers Housing Finance Policy Center