This post is on spending on homeownership rates and how they changed over time. And yes, I’ll look at how it changed by administration. Why not? Presidents like to take credit for it. Consider.
Here’s stuff on the White House web site. Here’s a speech by GW at HUD talking about some of his plans. And here’s a vintage Angry Bear piece… Kash catches GW crediting an insignificant amount of tax incentives for increased homeownership increases. But there are many reasons a President might affect homeownerhsip. As noted in GW’s speeches, the President funds programs that help people buy homes. There’s HUD. There are tax incentives. And of course, the effect of the economy.
Data goes back to 1965 and comes from the Census. Given the data is quarterly and not annual, I’m going with Q1 of the year figures. Thus, I’m crediting each President with the first quarter of the year they leave office… hence, Clinton’s figures go from Q1 1993 to Q1 2001, and the percentage change I’m using is the percentage change over that time.
Here’s what it looks like.
And a summary.
The three Dem admins are one, two, and three. (FWIW, the a means test indicates that the average increase in the change in homeownership is different between Dem and Rep administrations with a P Value of 0.031. (Note correction… earlier I had posted .021)) GW comes in fourth, but with rising interest rates, he may yet drop.
And GW has been the beneficiary of extremely low real interest rates, which should only boost home ownership rates. On the other hand, Reagan suffered from high real interest rates as the Fed continued to worry about inflation returning even toward the end of his administration.
But do real interest rates determine the whole thing? Well, no. Under GHW, real interest rates fell… but so did home ownership. Under Clinton, real rates rose, and were higher for most years than all other administrations except Reagan. LBJ/JFK seems to be in the middle of the pack for real interest rates.
So clearly, other things matter too.
I guess this post suggests some further posts…. funding on housing programs, and real interest rates. I’ll try to get to those soon.
In comments, reader Spencer notes…
At Census they have ownership rates back to 1900 although it is not as frequent.
What this data shows is that the homeownership rate was very steady in the low 40% from 1900 to 1940. But from 1940 to 1980 it rose steadily from the around 40% level to around 65% level you show in the chart.
If you look at the longer term trend since 1940 the recent rise appears in a different perspective. What it would show is that the rate of increase in homeowners ship rise from 1995 to 2005
is about the sames as was experienced from 1940 to 1980 — about a half a percentage point each year.
I also add… part of the reason for sustained high real interest rates under Reagan not mentioned earlier was the rapid run-up of the national debt. So Reagan wasn’t entirely a victim of circumstance… this was partly self-inflicted.