Homeownership Helped Make America. It’s Slipping Away for Millions.

Theodore and Patricia Bladykas, with their 14-month-old twin daughters Patricia Ann and Betty Ann, move into their new home in Levittown, N.Y., on Oct.1,1947. They were the first family to move into the development. (Edna Murray / Newsday via Getty Images)

The American Dream is still alive, but it’s getting more expensive.

Interest on a 30-year fixed-rate mortgage—that modern financial tool that lets middle-class workers become kings and queens of their own castles—rose to 7.4% on Oct. 8, the highest since November 2023 and up more than a percentage point in a year.

Higher rates translate into higher monthly payments, and can mean the difference between being a homeowner and a renter, particularly at a time when home prices have soared.

Encouraging homeownership has been a government priority for more than a century. “A family that owns its home takes pride in it, maintains it better, gets more pleasure out of it, and has a more wholesome, healthful, and happy atmosphere in which to bring up children,” Herbert Hoover’s Department of Commerce wrote in the 1923 pamphlet “How to Own Your Home.”

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Every administration since Hoover’s (1929-33) has made increasing homeownership a goal. The 30-year mortgage is relatively new, authorized by Congress in 1948, but—now accounting for 90% of all mortgages—its impact has been huge.

From 1940 to 1960, owner-occupied homes rose from 43.6% of U.S. housing stock to 61.9%, according to the Census Bureau. The homeownership rate has since maintained a range of 63% to 69%, fluctuating with the cost of money and state of the economy.

America became, as President George W. Bush said in 2004, an “ownership society.”

Today, besides high rates, headwinds include a historically tight housing market where the average house sold in the second quarter went for a cool half million, hovering near a record high. A typical “starter home” is worth almost $200,000, according to Zillow.

Add in wages that struggle to keep up with inflation, and the American homeowner is under pressure.

To be sure, the idea of an ownership society is a modern one. Renters consistently outnumbered owners in America until the mid-20th century.

Homes tended to be multigenerational and remain in the family. Those without family connections rented, often in the nation’s expanding cities. This included immigrants, the formerly enslaved and their descendants, and American Indians.

Alexander Hamilton, a native of the Caribbean island of Nevis, rented on Wall Street in the 1780s while establishing his law practice. Abraham and Mary Todd Lincoln had their first son in a Springfield, Ill., rental.

The barriers to joining the ownership class were daunting.

In 1923, when Hoover published the pamphlet, a typical mortgage required 50% down, as opposed to 10% for today’s first-time buyers. Loans matured in five or 10 years, so they might need renegotiating, and there was little or no amortization, or paying down of principle. Second and third mortgages might be needed just to make the initial payment.

“Maintaining a high percentage of individual homeowners is one of the searching tests that now challenge the people of the United States,” Hoover’s pamphlet warned. A decade later, the Great Depression proved it prescient.

During 1932 and ’33, an average of 1,000 mortgages were foreclosed on every business day, more than 250,000 each year, according to the Fed, and up to half of all mortgages were delinquent on Jan. 1, 1934.

Hoover called it “one of the tragedies of this depression” as he signed the Federal Home Loan Bank Act in 1932. President Franklin D. Roosevelt, elected in 1932, made mortgage reform central to the New Deal, including establishment of the Federal Housing Administration in 1934.

Critics called it socialism, complaining “Uncle Sam will…play Santa Claus” to unqualified borrowers, as the Lancaster County, Neb., Weekly wrote Oct. 11, 1934.

A chief defender was John H. Fahey, FDR-appointed head of the Home Owners’ Loan Corp., which refinanced mortgages in default to prevent foreclosure. “The program does not put the government into the business of financing homes,” Fahey said in an Oct. 14, 1934, Associated Press article. “It protects the savings of the investor and provides security to the home-financing institutions.”

Of more than one million loans purchased by the HOLC from 1933 to ’35, 20% ended in foreclosure. More than 800,000 homes were saved.

The HOLC, however, also originated “redlining,” the practice of mapping neighborhoods by creditworthiness. This reinforced the racial and class divides that still present in many parts of America.

Levittown, N.Y., in 2026 is populated by a growing number of McMansions that can cost as much as $1.5 million apiece and have provoked a community backlash. Photo: J. Conrad Williams Jr./Newsday RM/Getty Images

Government involvement in housing deepened with the Servicemen’s Readjustment Act of 1944, better known as the GI Bill. It provided money to service members for education, businesses, and housing.

Bill Levitt was there to turn that money into the American Dream. He brought mass production to housing, building whole towns from scratch, with schools, parks, and street after street of identical houses, most famously in Levittown, N.Y. “The houses might look quite attractive if there weren’t so incredibly many of them,” Harper’s Magazine wrote in September 1948.

What they lacked in beauty they made up for in affordability. Veterans could rent the 4.5-room “bungalows”—complete with a General Electric range and refrigerator—for a year at $65 a month ($904 in 2026 dollars), with the option to buy at $7,900, no cash down.

“I think they’ll buy, all right,” said Levitt, who became a prime architect of suburbia. He also enforced segregation, limiting occupancy to the “Caucasian race.”

With the introduction of the 30-year mortgage for new homes in 1948, and existing homes six years later, America was becoming an ownership society.

“The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country,” Bush said on June 17, 2004, as the homeownership rate topped 69%.

The rate dropped precipitously after the 2007-10 subprime-mortgage crisis, when waves of foreclosures underscored the fact that mortgages, like all investments, are subject to the vagaries of the marketplace. Housing prices can fall, you might get laid off, termites could infest your basement. That is why lenders shied away from long-term mortgages until getting government backstopping.

To borrowers, for whom this will probably be the largest investment of their lives, a mortgage brings endless nights of worries. The monthly payment schedule grinds unceasingly forward, with no account for the vagaries of life.

As kings and queens of castles everywhere know, uneasy lies the head that carries a mortgage.

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