The Federal Reserve on Homeownership

Homeownership has always been a hallmark of America life. In recent years, homeownership became more readily accessible. In fact, according to the Federal Reserve, "Tax incentives, mortgage insurance from the Federal Housing Administration, and other government policies all contributed to a long rise in the U.S. homeownership rate--from 45 percent in 1940 to a peak of 69 percent in 2004."

At first glance, this accessibility seemed like a positive step, since research has shown that high levels of homeownership can increase school and community involvement, lead to higher graduation rates, and of course neighborhood stability. But predatory lending and underwriting practices meant that many buyers became homeowners before they were financially ready.

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