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It’s often said that the 2008 US housing crisis marked the death of the American Dream, in which widespread homeownership stood as a marker of the prosperity and stability associated with the country’s middle class. But it turns out that the American Dream is alive and well elsewhere in the world.
In Singapore, 9 out of 10 households own their home. In Bulgaria, 8 out of 10 are homeowners. And in Spain, the Czech Republic, Slovenia, Italy, Finland, Ireland, and Mexico, at least 70% of households own a home.
In the US, by contrast, less than two-thirds of American families own a home, report economists Laurie Goodman and Christopher Mayer in a new study in the Journal of Economic Perspectives.
In 1990, the US homeownership rate was at 64%, a little above average for 18 high-income nations in Europe and Asia. Twenty-five years later, the share of American homeowners is still 64%—but now, the US is fifth from the bottom of the list among the 18 countries.
Homeownership rates, 1990 vs. 2015
Over the same period, by contrast, the Czech Republic and Sweden saw steep increases in their homeownership rates. Even Mexico, where homeownership rates have fallen since 1990, currently has a higher share of homeowners than the US.
Homeownership in the US surged until 2005, thanks to policies like the 87-page, 100-point plan released by the Clinton Administration or George W. Bush’s American Dream Downpayment Initiative to help first-time buyers. Then the 2008 financial crisis hit, erasing $7 trillion in home equity.
The result of all that fluctuation is that American homeownership today is much lower than in Singapore or the Czech Republic. Americans may soon start aspiring to live out the dreams of other nations.
US homeownership rate, 1990 to 2015