Government Housing Policy On Home Ownership Rates

1133 WordsDec 16, 20145 Pages
Introduction Promoting home ownership has been a public policy goal of the U.S Federal Government for decades. U.S housing policies carried out by government entities aim to facilitate growth in home ownership rates. In 2012, the federal government spent $270 billion to help Americans buy or rent homes (Fischer & Sard 2013). However, it has been argued that government housing polices have had an insignificant impact on stimulating rates in home ownership. U.S Census Bureau recently reported that home ownership rate decline to a 20 year low in 2014 (Gupta 2014). In order to determine the effectiveness of government housing policy on home ownership rates, we examined the impact of a number of government policies designed to improve aggregate homeownership. In the first section, we assess the value of specific policies designed by the U.S federal government to stimulate home ownership. The majority of policies carried out by the government entities is separated into the following categories: tax policies used to benefit homeowners and direct subsidies designed to alleviate the financial pressure of owning a home. Following, we examine the effectiveness of the primary government entities that provide benefits to homeowners. Fannie Mae, Federal Home Loan Bank, and Freddie Mac are three major government entities that provide benefits to homeowners. Using the results from the reports “Accounting for Changes in the Homeownership Rate” and “Mortgage Innovation, Mortgage Choice,

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