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In this guest column, a former president of the National Association of REALTORS® weighs in on how a shift in government policy could help more people achieve the age-old American Dream of home ownership.
Homeownership is a key driver of financial security in the United States. Americans today who purchased a median-priced single-family home a decade ago have typically seen their wealth increase by nearly $200,000 through home equity.
This isn't just a number on a balance sheet. It represents college tuition, seed money fora business, or a cushion for retirement.
The strength of homeownership lies in its ability to build wealth over time. As a person pays down their mortgage and property values appreciate, their financial stability grows. Homeownership serves as a reliable savings plan and remains one of the most effective financial tools available.
There are also practical, near-term advantages. Fixed-rate mortgages provide steadiness in an unpredictable market, in contrast to the volatility of rising rents. Meanwhile, tax benefits like mortgage interest deductions and property tax write-offs can meaningfully reduce annual burdens.
Unfortunately, these advantages remain out of reach for many. Rising housing costs and stagnant wages have made the path to homeownership increasingly challenging, particularly for certain groups. While 72% of white Americans own homes, only 45%of Black Americans do. Asian and Hispanic homeownership rates are at 63% and51%, respectively.
At this intersection of opportunity and inequality lies both a significant challenge and a promising chance for transformative action in the U.S. housing market.
Enter real estate professionals who position themselves as wealth-building partners for their clients. With their finger on the pulse of local markets, real estate professionals can guide aspiring homeowners through the complex journey of finding not just a house but a sound investment for their future – and help to bridge gaps and create opportunities for all Americans.
Real estate professionals can guide first-time buyers through the labyrinth of down payment assistance programs, many of which are underutilized due to a lack of awareness. They can connect clients with lenders who offer creative financing solutions tailored to diverse financial situations. They can also leverage their market knowledge to help buyers find properties with strong appreciation potential, maximizing long-term wealth creation.
Policy changes could boost housing supply
Real estate professionals are on the front lines of fair housing efforts, too. Many are equipped with training to recognize and combat housing discrimination. The National Association of REALTORS®, for instance, offers tools like Fairhaven, a fair-housing simulation training for real estate professionals.
But we can't do it alone. To truly democratize the wealth-building potential of homeownership, we need policy changes at every level of government.
Local policymakers can start by reassessing zoning laws that artificially constrain the housing supply. Many cities still have regulations that effectively prohibit the construction of denser, more affordable housing options. Loosening these restrictions can help increase the inventory of starter homes, making that crucial first step onto the property ladder more achievable for more people.
At the federal level, tax reform is upon us once again, as most of the provisions of the Tax Cuts and Jobs Act expire next year. That represents an opportunity to update America’s tax law to increase access to homeownership by adding to the nation’s severely limited inventory.
NAR supports bipartisan legislation to decrease the equity penalty and incentivize more long-term owners to sell their homes, attract private investment to build and rehabilitate owner-occupied homes, incentivize the conversion of commercial buildings into residential units and mixed-use properties, and allow certain descendants of veterans to take advantage of their unused VA home loan benefit.
The ripple effects of increased homeownership extend far beyond individual wealth creation. Communities with higher homeownership rates often see improved schools, lower crime rates, and stronger local economies. These benefits create a virtuous cycle, enhancing the quality of life for both homeowners and renters.
As we reimagine the American Dream for the 21st century, homeownership should remain at its core – not as an exclusive club but as an achievable goal for all who desire combining innovative real estate practices, forward-thinking policies, and a commitment to equity, we can create a future where the wealth-building power of homeownership is genuinely accessible to all.
Read in the Phoenix Business Journal
Vince Malta is CEO and broker at Malta & Co. Inc. and former president of the National Association of REALTORS®.
