Having grown for nearly a decade, U.S. homeownership rates continue
to break records, particularly in rural or nonmetro areas. At the
start of 2004, about 75 percent of nonmetro households and 67 percent
of metro households owned their homes. On average, nonmetro homes
appear to be a good investment, having appreciated in value at
least as rapidly as metro homes during the past decade.
Homeownership generally helps both owners and their communities.
Owning one’s
home has financial advantages, as homeownership serves as a hedge against rising
housing costs, and contributes to investment and wealth accumulation. For most
households, tax advantages also add to the benefits of homeownership. For all
U.S. homeowners, the median equity in their home accounted for over half of
their total net worth in 2001. And, homeownership by low-income households
is associated with their children’s greater educational attainment and
future financial success. Rural communities also benefit from homeownership.
Homeowners tend to become more involved in their communities and work toward
community improvements, such as better schools.
Homeownership levels and rates of change are distributed unevenly across geographic
areas. Although the overall nonmetro homeownership rate rose 3 percentage points
during the 1990s, one of every four nonmetro counties actually experienced
a decline. Nonmetro homeownership rates were lowest in the West and along the
Mississippi River in Arkansas and Alabama. Nonmetro homeownership was highest
in the upper Midwest, from Michigan to North Dakota.
Nonmetro homeownership rates vary by age group as well. Homeownership rates
are particularly high for older persons. Over 82 percent of nonmetro householders
age 65 or older owned their home in 2000, compared with 76 percent in metro
areas. For most age groups, nonmetro homeownership rates exceed metro rates.
Nonmetro minority households and poor households consistently have rates of
homeownership well below the norm, but these households are also experiencing
the most rapid gains. In nonmetro areas, 59 percent of Hispanics owned their
homes in 2000, up from 50 percent a decade earlier. Low-income households may
benefit from Federal, State, and local programs designed to make homeownership
more affordable. One such program is USDA’s single-family direct home
loan program, in operation for over 50 years in rural America. This has been
the major Federal program to provide low-income rural families with low-interest
home mortgages over the last three decades.
What does the future hold for homeownership in rural America? Most likely,
nonmetro homeownership will continue to grow. This was even the case during
the recent economic downturn, when the most vulnerable population groups experienced
the largest increases. Nonmetro homes appear to be a good investment, and rural
borrowers today are better off in the cost and availability of home mortgages
than in the mid-1990s.
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