June Marks National Homeownership Month

June is National Homeownership month! A time dedicated to celebrating the many benefits that homeownership brings to families and friends in communities across the country.

What does homeownership mean to you? Americans often think of their homes as more than just a place to “hang their hats.” Homeownership has long been considered part of the greater “American Dream” that includes “Life, liberty and the pursuit of happiness” as mentioned in our country’s Declaration of Independence.

Here’s a rundown of key events related to homeownership dating back to our nation’s infancy:

THE MAN WHO WAS THE SECOND VICE PRESIDENT AND THIRD PRESIDENT OF THE UNITED STATES BELIEVED THAT PROPERTY OWNERSHIP WAS A CITIZEN’S RIGHT. THOMAS JEFFERSON PUSHED FOR LEGISLATION THAT HELPED DEFINE PROPERTY LINES AND A SYSTEM FOR PURCHASING LAND THAT WAS THE BASIS FOR HOW REAL ESTATE AND OWNERSHIP ARE DESCRIBED AND TRANSFERRED TODAY, CALLED THE LAND ORDINANCE OF 1785.

PRESIDENT ABRAHAM LINCOLN SIGNED THE HOMESTEAD ACT INTO LAW, WHICH HELPED ESTABLISH THE WESTERN PART OF THE COUNTRY THROUGH MIGRATION. SETTLERS WHO PAID A FILING FEE AND COMPLETED FIVE YEARS OF CONTINUOUS RESIDENCE RECEIVED OWNERSHIP OF 160 ACRES OF PUBLIC LAND. HOMESTEADERS ALSO HAD THE OPTION OF PURCHASING THE LAND FROM THE GOVERNMENT FOR $1.25 PER ACRE. THE HOMESTEAD ACT LED TO THE DISTRIBUTION OF 80 MILLION ACRES OF PUBLIC LAND BY 1900.

BANK COLLAPSES, MILLIONS OF JOBS AND LIFE SAVINGS LOST DURING THE GREAT DEPRESSION RESULTED IN UP TO A QUARTER OF THE NATION’S MORTGAGES GOING INTO DEFAULT. THE NUMBER OF MORTGAGES DROPPED DRAMATICALLY FROM NEARLY 6,000 IN 1928 TO UNDER 1,000 IN 1933. U.S. HOMEOWNERSHIP DROPPED TO ITS LOWEST LEVELS OF THE CENTURY IN 1940.

THE FEDERAL HOUSING ADMINISTRATION (FHA) WAS FORMED AND PROVIDED ACCESS TO FLEXIBLE MORTGAGE FINANCING. PRIOR TO ESTABLISHMENT OF THE FHA, MORTGAGES REQUIRED 50% DOWN PAYMENTS AND TERMS WERE GENERALLY FIVE OR TEN YEARS LONG AND USUALLY HAD LARGE BALLOON PAYMENTS DUE AT THE END.

CONGRESS PASSED THE SERVICEMEN’S READJUSTMENT ACT – MORE COMMONLY KNOWN AS THE GI BILL OF RIGHTS. THE GI BILL HELPED VETERANS PAY FOR COLLEGE AND BUY HOMES. THE VETERANS ADMINISTRATION (VA) STILL INSURES LOW- TO ZERO-DOWN PAYMENT LOANS FOR VETERANS, ACTIVE-DUTY SERVICE MEMBERS AND THEIR SPOUSES.

A STORM WAS BREWING AS LENDING THRESHOLDS AND INTEREST RATES DROPPED, MAKING MORTGAGES EASY TO GET AND DRIVING HOME PRICES UP.

THE NATIONWIDE REAL ESTATE BUBBLE THAT FORMED DUE TO FRENZIED DEMAND AMIDST LOOSE LENDING PRACTICES BURST, AND HOME PRICES BEGAN A MULTI-YEAR DECLINE THAT LED TO APPROXIMATELY EIGHT MILLION FORECLOSURES.

FIRST-TIME HOME BUYER TAX CREDITS AND OTHER HOUSING STIMULUS PROGRAMS WERE ESTABLISHED TO HELP HOMEOWNERS AVOID FORECLOSURE.

U.S. HOUSING PRICES BOTTOMED OUT IN MARCH, HAVING DROPPED BY 33%.

U.S. HOUSING VALUES RECOVERED ALL $9-TRILLION DOLLARS LOST IN THE HOUSING CRISIS OF THE PRIOR DECADE.

AFTER A LONG-ANTICIPATED SPAN OF RISING MORTGAGE INTEREST RATES THAT BEGAN IN 2018, RATES FOR 30-YEAR FIXED RATE MORTGAGES EXPERIENCED THE SHARPEST ONE-WEEK DROP IN OVER A DECADE IN LATE MARCH, SETTING THE STAGE FOR HIGHER AFFORDABILITY HEADING INTO THE TRADITIONALLY BUSY HOME BUYING AND SELLING SEASON.

THE HOUSING MARKET CAME TO A SCREECHING HALT IN MARCH 2020, WHEN MUCH OF THE NATION SHUT DOWN IN RESPONSE TO THE COVID-19 PANDEMIC. THE SUMMER MARKET REBOUNDED THUS LEADING TO HYPER-COMPETITIVE CONDITIONS.  WORK FROM HOME ALLOWS MANY TO HOUSE HUNT OUTSIDE OF THEIR NORMAL COMMUTER RADIUS – HOME GROWTH UNABLE TO KEEP UP WITH HOME SALES. MORTGAGE INTEREST RATES RECORD LOWS ALSO PLAYED KEY FACTOR IN THE BOOM FOR HOMEBUYING.

HOME SALES CONTINUE TO RISE RECORD HIGHS DUE TO SUPPLY AND DEMAND ISSUES. WITH A RECORD LOW OF 910,000 TOTAL HOUSES ON THE MAREKT AND A 16.9% HOME VALUE INCREASE, THE HOUSING MARKET IS IN FAVOR OF SELLERS.

MORTGAGE RATES ON THE RISE. THE BATTLE OF HOMEOWNERSHIP CONTINUES. MORTGAGE RATES JUMP TO 4-5% WHILE THE MARKET IS STILL HOT AND UNABLE TO KEEP UP WITH DEMAND. RENTAL PRICES AT ALL TIME HIGH.