June is National Homeownership Month. Homeownership provides many social and economic benefits, not just for the homeowner, but for the communities in which they live. One aspect of the American dream is to own a home.
Unfortunately, the idea of homeownership is only a dream instead of a reality for many. If an individual is fortunate enough to purchase a home, they are doing it much later in life than previous generations.
First-time home buyers currently have a 32% share of the housing market — significantly lower than the long-term average of 40%. The biggest reason for the decrease is the rising student loan debt. According to the Ohio Attorney General’s office, the average Ohioan carries over $30,000 in student loan debt. With monthly payments ranging from a few hundred dollars to close to four figures, most people simply cannot save for a home.
In fact, the average age for a first-time home buyer has increased by 10 years, from the mid-20s to the mid-30s. Recent studies have shown that eight out of ten millennial renters have saved less than $10,000 for a down payment and nearly half have not saved a dollar. But that is not due to a lack of interest in buying a house. In fact, outside of planning for retirement, millennials prioritize purchasing a home over every other major milestone in life—even getting married and having kids.
What can we do to fix this problem?
My joint sponsor, Sen. Bob Peterson, and I introduced Senate Bill 139 last month to help put Ohioans on the track to homeownership. The First-Time Home Buyer Savings Act creates a savings account that offers the benefit of tax deductions on contributions and interest earned for money that will go directly towards a down payment for a first-time home purchase.
The legislation was modeled after current law in eight other states that offer similar programs to their residents. These programs have given opportunities to people who probably thought owning a home was out of reach.
Ultimately, I want to give people hope that they can buy a home. However, without changes, the reality is that many young people will not have a choice but to delay that purchase—if they ever do it at all.
We want to help make Ohio an even more attractive place for people to move and to stay.
Innovative ideas, like the First-Time Home Buyer Savings Act will achieve those goals, and most importantly it will help make homeownership the attainable part of the ‘American dream’ that it used to be.
(Gavarone is an Ohio senator from Bowling Green.)