There are a lot of different housing-finance systems in the world, but the U.S. system is unique in being centered on government-sponsored enterprises. These GSEs—Fannie Mae and Freddie Mac—still dominate the system even though they went broke and were bailed out when the great housing bubble they helped inflate then deflated.
They have since 2008 been effectively, though not formally, just part of the government. Adding together Fannie, Freddie and Ginnie Mae, which is explicitly part of the government, the government guarantees $6.1 trillion of mortgage loans, or 59 percent of the national total of $10.3 trillion.
On top of Fannie-Freddie-Ginnie, the U.S. government has big credit exposure to mortgages through the Federal Housing Administration, the Federal Home Loan Banks and the Department of Veterans Affairs. All this adds up to a massive commitment of financing, risk and subsidies to promote the goal of homeownership.
But how does the United States fare on an international basis, as measured by rate of homeownership? Before you look at the next paragraph, interested reader, what would you guess our international ranking on home ownership is?
The answer is that, among 27 advanced economies, the United States ranks No. 21. This may seem like a disappointing result, in exchange for so much government effort.
Here is the most recent comparative data, updated mostly to 2015 and 2016:
|Advanced Economies: Homeownership Rates|
|Rank||Country||Ownership Rate||Date of Data|
Sources: Government statistics by country
It looks like U.S. housing finance needs some new ideas other than providing government guarantees.
Image by thodonal88