Wednesday, March 21, 2007

Today's "Fun With Numbers": Homeownership Rates

A couple years ago I was wondering if there was any measure at all by which you could say that life in America was improving under the Bush junta. It turns out that, well, at the time, home ownership rates were going up. Today's unease in the housing markets points out the fact that the rate of homeownership has now been dropping for two years.

So I cracked open my Stat Abstract and poked around. What do the rates of home ownership tell us about American politics? Can you see the differences in public policy reflected in this single statistic?

Conservatives are very big on the idea of home-ownership. If you tie people to mortgages, all sorts of good things are supposed to happen to the community - not least of which (from the Conservative POV, anyway) is that homeowners are then more likely to vote conservative. They may even be right. (The Thatcher regime is exemplary here.)

OK, let’s agree that “every household owns their house” is an untrammeled Good Thing, a goal that society should be working toward. Obviously, home ownership will never reach 100% - any number of people for any number of reasons don’t WANT to own a house - but let’s assume that higher rates of homeownership are a good thing. A nation of home-owning, Jeffersonian/independent, stout yeomen is certainly better than a nation of landlords-and-tenants.

So let’s take a look at the historical data.

For most of the first half of the 20th century, the rate of homeownership was around 45%. WWII changed things: by 1955, the rate was about 55%. The US Census Bureau started tracking this datum in 1965. We now have 42 years of annual data.

LBJ’s second term saw four years of advance: the rate was 63.0% when first measured in 1965, and rose to 63.9% in 1968. +0.9% in four years.

The Nixon/Ford years saw a couple of recessions: even so, they had six years of advances, one year stagnant, and one year of decline. They saw 64.2% in 1969, rising to 64.7% in 1976. Not as good as under the boom years of the previous Democratic administration, but nevertheless, real advances.

The Carter years saw a recession: still, the Carter years saw four years of advance, from 64.8% in 1977 to 65.6% in 1980. For all the talk of "stagflation" and "the misery index" ( say nothing of prime interest rates OVER 20%...), we had BETTER growth under FOUR years of Carter than we had seen under the EIGHT years of the Nixon/Ford years. (+0.8% growth in four years of Dems, vs. +0.5% growth under the previous eight years of Rs.)

So in the first 16 years of tracking this, there were eight years of Dems, and eight years of Rs: eight years of advances under Dem, and six yrs of (smaller) advances under Rs. Note that 1980's “65.5%” was a peak, a high-water mark not to be exceeded for nearly a generation.

Q: If home-ownership rates continued to rise right through the Carter recession, what would it take to make that rate decline?

A: An anti-worker Republican administration. After Carter lost in 1980, the nation would LOSE a full generation of progress.

Which leads to the sad story of the Reagan years: seven years of decline, and one year of advance. America fell from a homeownership rate of 65.4% in 1980, down to 63.9% in 1988. At the end of Reagan’s administration, home ownership had dropped to what it had been at the end of the Johnson years, fully twenty years before. The nation lost ground, as measured by an index that the Republicans pretend to care about.

By this metric, there has never been a worse administration - before or since - for the American middle class than the Reagan administration. Say it again: The Reaganauts set the American middle-class back more than a quarter century. We are still suffering from the damage they did.

Under Real President Bush: two years of advance, two years stagnant: 1992 saw the index climb back to almost as high as it had been in 1969, 23 years before.

In 1993, The Dems regained the White House. Under Clinton, the nation recovered from the Reagan-Bush nightmare: a year of continued decline, a year of stagnation, and then six years of advances, two of which were regaining the ground lost under Republicans; but then on to four successive years of record rates of homeownership.

By 1995, home ownership exceeded what it had been at the end of the Reagan-Bush nightmare - a homeownership rate comparable to what we had had back in 1974, 21 years before. It took until 1997 before home ownership finally exceeded what it has been at the peak back in 1980, under Carter. 1997, 1998, 1999, 2000 were new record high rates of homeownership.

Under the Pretender: we have six years of data so far - four years of advances, to new record highs, but now two years of decline off that peak. And the news hints that 2007 is starting to look like it’s going to be remarkably bad, too. (Note that Bush the Lesser's record here is already less good than Clinton's, with two years still to endure.)

So: we now have 42 years of data - 26 years under Republicans, 16 under Democrats.

16 yrs under Ds: 1 year stagnant; 1 year of decline (both instances coming out of a R recession); and 14 years of advances. 12 of those advances were to record high rates of homeownership.

26 years under Rs: 3 years stagnant, NINE years of declines, 14 years of advances.
Six of those advances were recovering lost ground; only 8 of those advances were to record highs.

Again, in a bit more detail:
Under the Dems the ONLY recorded decline ever seen was a single instance of - 0.1%, coming out of the Bush recession in Clinton's first year.

By party:
Under 16 years of Dems: A +5.1% increase in the rate of home ownership.
Under 26 years of Rs: +0.6%
Annualized, that's 13 times more progress under Ds than under Rs.

By term:
LBJ: the net change from start-to-end of the second term was +0.9%
Nixon/Ford: + 0.8%
Carter: +0.9%
RR: -1.8%
Bush41: +0.3%
Clinton: +3.3%
The Pretender (1st 6 years): +1.3%

Clinton and Carter were both more conservative than Nixon.
Let's assume for the sake of argument that the Nixon/Ford years were part of the post-war liberal consensus and that there really WAS a Conservative Revolution that began with RR.
So look at LBJ, Nixon, Ford, Carter, and Clinton together:
that's a change of +5.9% in 24 years.
Contrast that with the Conservative Republicans: RR, GHWB, GWB:
that a net change of -0.2% in 18 years.
18 years of conservative rule saw a net motion DOWNWARD.
Homeownership slips under conservatives.
Conservatism is bad for conservative principles.

So what do we conclude from looking at the home-ownership numbers?

a) The Reagan era was a disaster for home-ownership rates in America. That is to say, a disaster for the middle class, and for those aspiring to the middle-class. It wasn't just that we stopped making progress in the Reagan era: rather, we lost ground. It wasn't just "12 years of treading water" - no, by this measure, the Reagan Era set the country back by about a quarter-century. (And this was far from the only damage they did: see my previous post on unemployment.)

b) IF home-ownership - a stand-in metric for "the security of the middle class" - is important to you, then you should know and understand that, historically, the Democrats are at least ten times as good on this issue as are the Rs. You could defend the assertion that the Dems are demonstrably thirteen times as good for getting people into the home-owning middle class as are the Rs. Look at the data, and stop listening to their lies.

c) And if you care about the facts, and about how public policy affects every one of us, and if you care about improving the lot of the American public: then "home-ownership" is yet another reason why you should never, ever pull the lever for a Republican.


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At 8:12 AM, Blogger Blue Tyson said...

You should check out Australian house prices.

We have this big desert thing in the middle!


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