Us Versus Them

Home ownership is purportedly revered in the U.S. In fact, some in Washington consider it
a right so much so they will change banking and other laws to make it possible for anyone to
own a home, whether that anyone can really afford to make the mortgage payment or has a
credit history that indicates they actually will make the mortgage payment. Barney Frank (God
bless his dearly departed sole - from Congress that is), and his minions did exactly that
(changed numerous laws and regulations) in the early 1990s, thereby providing the basis for
the credit and housing debacle that ensued. We really dont want to do that again.

So, if home ownership in the U.S. is revered to the point it is considered by many to be a
right, how does home ownership in our great country compare to home ownership in the rest of
the world? Prepare to be surprised!

Where do you think the U.S. ranks in the world in the percentage of our population that
owns their home? Well, if you think we are number 1, you would be wrong. How about the U.S.
being one of the top 10 countries in the world? Wrong again. Ill go ahead and cut to the chase
to save you time and me column space. Out of 43 countries for which a measure of home
ownership is available, we are number 34 with a mere 65% of our homes owned, just behind the
United Kingdom with 67%.

Number 1 in the world is - get this Romania, where almost 97% of the population owns
their home. Some other countries, just for comparison: China, 90%; India, 87%; Russia, 84%;
Mexico, 80%; Canada, 69%; and Australia, 67%. Occupying places 42 and 43 at the bottom of
the list are Germany and Switzerland with 53% and 44%, respectively.

It is my opinion the U.S. ranks way down the list as it regards home ownership because, as
a society, we dont save at the rate other countries save and we need greater savings in order to
make required down payments or purchase homes outright for cash. While I am confident I
would find some significant aberrations if I compared every countrys home ownership rate to
the countrys savings rate, I believe the following savings rate data supports my general
contention that other countries save at rates commensurate with their home ownership rates.

The highest personal savings rate in the world is found in China where, in 2012, the
population saved approximately 50% of their net income. Romanians saved approximately 28%
of their take home pay in 2011, the last year for which data is available. U.S. and Canadian
citizens saved, respectively, approximately 4% and 5% of their income in 2012.

I fully realize there are many factors other than savings that affect our ability (and desire) to
own a home. To name just a few, personal income tax rates, the unemployment rate, actual
disposable income, along with the debt and total deficit of each country. Hmmm. Maybe Ive
found a few issues other than our savings rate that influences U.S. home ownership.

Ed Stewart lives in Grant Parish and is a licensed real estate agent in Louisiana. He is associated
with Keller Williams Realty Cenla Partners in Alexandria and can be reached on his cell (318-201-
3991) or office telephone (318-619-7796). Each Keller Williams Realty office is independently
owned and operated. Send your real estate questions to Ed via email at edstewart@kw.com or
chronicle1876@yahoo.com.