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Noah Smith

Wall Street Puts the Squeeze on the Housing Market

Research suggests that concentrated corporate ownership can drive up prices in some cities.

Your new neighbor might be a corporation.

Your new neighbor might be a corporation.

Photographer: Matthew Staver/Bloomberg

President George W. Bush pledged to make the U.S. an “ownership society” and tried to promote homeownership via tax credits, assistance with down payments and a variety of other programs. In 2004, this probably looked like a good bet — the U.S. homeownership rate had risen to about 69 percent, from 64 percent in the mid-1990s. But Bush failed. Just a few years later, a deflating housing bubble followed by a financial crisis and recession sent homeownership into a nosedive:

During the crisis, President Barack Obama did too little to protect the ownership gains that Americans had enjoyed in the late 1990s and early 2000s. Hamstrung by a recalcitrant Congress and an internal distaste for bailing out citizens who made bad real estate decisions, Obama enacted only a modest program to reduce foreclosures. The result was that homeownership fell to levels not seen since the mid-1960s. Now it’s recovering, but if another recession hits, all bets are off.