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
1 Singapore 90.9% 2016
2 Poland 83.7% 2015
3 Chile 83.0% 2012
4 Norway 82.7% 2016
5 Spain 77.8% 2016
6 Iceland 77.8% 2015
7 Portugal 74.8% 2015
8 Luxembourg 73.2% 2015
9 Italy 72.9% 2015
10 Finland 71.6% 2016
11 Belgium 71.3% 2016
12 Netherlands 69.0% 2016
13 Ireland 67.6% 2016
14 Israel 67.3% 2014
15 Canada 67.0% 2015
16 Sweden 65.2% 2016
17 New Zealand 64.8% 2013
18 France 64.1% 2015
19 Mexico 63.6% 2015
20 United Kingdom 63.5% 2015
21 United States 63.4% 2016
22 Denmark 62.0% 2016
23 Japan 61.7% 2013
24 Austria 55.0% 2016
25 Germany 51.9% 2015
26 Hong Kong 48.9% 2017
27 Switzerland 43.4% 2015

Sources: Government statistics by country

It looks like U.S. housing finance needs some new ideas other than providing government guarantees.


Image by thodonal88