The history and the future of homeownership

Among the basic fundamentals of the American Dream are life, liberty and the pursuit of happiness. For 78% of Americans, that dream is rooted in homeownership.

So, how did we arrive at a place where it’s nearly impossible for first-time homebuyers to take their share of these basic rights? Homeownership is steeped in rich American history, and it’s important to take a look at the past to understand the present and revolutionize the future. Here’s a look at the history of homeownership and a glimpse into the future that Ownify is reimagining for first-time homebuyers, starting locally in the Triangle.

The past: The traditional mortgage as we know it 

Following the homestead days where land was free for the taking, the Great Depression permanently changed the way homes were bought and sold in America. Until that time, housing finance was managed exclusively by the private sector as short-term renewable loans with unrealistic requirements, often including down payments as high as 50% of the home’s purchase price and short loan maturity of 10 years or less. By 1933, nearly a quarter of these loans were in default. Then the U.S. government stepped in to establish Federal Housing Administration (FHA) insurance and Federal National Mortgage Association (Fannie Mae) to make home loans more accessible.

President Franklin D. Roosevelt famously said, “A nation of homeowners, of people who own a real share in their own land, is unconquerable.” With government support of the mortgage industry and improved loan access, the post WWII housing boom saw growth of U.S. homeownership increase from 44% to 62% between 1940 and 1960.

However, history has a habit of repeating itself, and the 2008 recession delivered another hard blow to the first-time homebuyer. The housing market bubble that had been forming for years finally burst when subprime mortgages, an immense consumer debt load and sinking home values converged, resulting in negative equity for nearly one in four homes in the US. Homeowners began defaulting on their home loans and, once again, the U.S. was in a state of housing turmoil. 

The present: First-time homebuyers are locked out of the market again

Rising rent and a pandemic have caused yet another crisis. A wave of millennials and Gen Zers are still renting due to first-time homebuyers being unable to secure financing for a home of their own. According to the National Association of Realtors (NAR), the average age of the first-time homebuyer has increased to a record high of 36, up from 30 in 2010. Also, first-time homebuyers account for only 26% of all buyers, a record low since NAR began tracking such data in 1981. To top it off, interest rates are currently hovering around 6-7% for a 30-year fixed mortgage, all of which contributes to the challenges first-time homebuyers face in trying to get into the market.

These staggering statistics may paint the picture that younger generations have no interest in buying a home, but that is not the case – they simply can’t meet the rising financial requirements and stiff competition. In fact, approximately 88% of those in the millennial and Gen Z group would rather own a home than rent, but they are stuck in an unpredictable cycle because of the lofty down payment and the competition of all-cash offers. The barriers to entry are more iron-clad than ever before, and many Americans are growing weary of a system that is failing them. 

The future: Reimagining the path to homeownership

Not wanting to let history repeat itself yet again, and recognizing revolutionary change would be needed to break the cycle of systemic industry challenges, Ownify reimagined the path to homeownership without the traditional mortgage. Through Ownify’s fractional homeownership program, first-time homebuyers can make as little as a 2% down payment and own 2% equity on day one, while building more equity with every monthly payment. With no mortgage and zero debt, first-time homebuyers can now compete in the market, with powerful cash offers that eliminate the financial contingencies required when purchasing with a mortgage.

At Ownify, we know the homebuying decision is made with both the head and the heart. Ownify’s passionate vision for the future is a world where first-time homebuyers can compete in the housing market, achieve financial freedom and enjoy the benefits of homeownership. The dream of securing a solid financial foundation to build a future. The ability to create a place of your own — manicuring the lawn to your liking, painting the walls that bold color that has been calling your name and welcoming furry friends to make cozy home memories. No matter how you choose to make your space yours, it will be just that — yours. 

While the traditional mortgage and loan system has deep roots in history, we can learn from the cycle rather than letting it repeat itself. Are you willing to move on with us from the system of the past and create a new future for first-time homebuyers? With Ownify as your homebuying partner, you can achieve the same American Dream of homeownership that has been such a big part of our history.

When you’re ready to make your dreams of homeownership come true, complete our pre-qualification to see how Ownify can work for you. Let’s leave mortgages in the past and enjoy the future — your future — of homeownership.

If you're ready to get pre-qualified then apply now here.

If you would like a quick check on your eligibility for Ownify, use our tool here.

To subscribe for updates, use the form below.