The U.S. is 250 years old. And in honor of this year’s national birthday celebration, Realtor.com highlighted five federal laws that have shaped homeownership in the U.S. from 1862 to 2008.
From there, the report breaks down the challenges we face now and the bipartisan legislation that could make a difference.
Here’s what you need to know.
How 5 Federal Laws Shaped U.S. Homeownership
1. Homestead Act of 1862
On paper, the Homestead Act of 1862 was open to more people than prior laws related to homeownership. It gave 160 acre plots of land to heads of family or anyone 21 and older who paid a small filing fee.
The catch, of course, was that land was taken from Native American tribes and given mostly to non-Natives.
Over 270 million acres across 30 states were claimed by 1976. The main reason this stands out as a landmark federal law is it treated homeownership as something earned through labor rather than inherited wealth.
In practice, though, the logistical and financial barriers to traveling west and working land for five years effectively ruled out most Black Americans and other minorities even after emancipation.
2. National Housing Act of 1934
The National Housing Act of 1934 created the Federal Housing Administration (FHA) to insure mortgages during the Great Depression. Down payments dropped from 30-50% down to 10%, and repayment terms stretched to 30 years.
Unfortunately, FHA underwriting also baked in redlining practices, which denied mortgages and home improvement loans to applicants in minority-majoirty neighborhoods. These practices suppressed minority homeownership and accentuated racial divides across cities.
Black Americans were steered into specific low-income neighborhoods and deliberately kept out of more affluent white ones.
This is where the modern mortgage as we know it got its start. But there was (and is) more work to be done to make homeownership more accessible to non-white homebuyers.
3. Servicemen’s Readjustment Act of 1944 (GI Bill)
In 1944, the Servicemen’s Readjustment Act, aka the GI Bill, gave eligible veterans zero-down, low interest loans for homes and businesses, guaranteeing over two million home loans by 1950. The total homeownership rate jumped from 43.6% in 1940 to 61.9% in 1960.
This built the American suburb and gave real estate agents a built-in audience of motivated, qualified veteran buyers. Even today, a zero-down VA loan today can cut the wait to homeownership by 4.4 years.
On paper, the eligibility criteria applied equally regardless of race. In practice, benefits were administered locally and through private lenders and institutions, which is where most of the well-documented racial disparities in GI Bill outcomes came from.
4. Fair Housing Act of 1968
The Civil Rights Act of 1968, also known as the Fair Housing Act, outlawed housing discrimination based on race, religion, sex, national origin, familial status, and disability.
President Lyndon B. Johnson signed the bill, and Minnesota Senator Walter Mondale championed it with these words:
“Outlawing discrimination in the sale or rental of housing will not free those trapped in ghetto squalor, but it is an absolutely essential first step which must be taken—and taken soon.”
According to Realtor.com’s research, Black homeownership rose from 38% in 1960 to 44% in 1980, where it essentially stalled for over four decades. Redfin data for mid-2025 shows the Black homeownership rate at 43.9%, down from 45% a year earlier.
The racial homeownership gap is actually worse today than it was in 1968 when the Fair Housing Act was passed. White homeownership climbed significantly through the postwar suburban boom and has remained elevated.
In mid-2025, the white homeownership rate was 74%, down slightly from 74.4% a year earlier.
5. Housing and Economic Recovery Act of 2008
In the year 2008, the Housing and Economic Recovery Act passed in the wake of the 2007 subprime mortgage meltdown and the Great Financial Crisis (GFC). The Act was a package of reforms that targeted multiple simultaneous failures in the housing and mortgage markets.
- Expanded FHA loan limits and tied future limits to home price growth
- Reduced the minimum down payment floor to 3.5%
- Created a repayable first-time homebuyer tax credit of up to $7,500
- Placed Fannie Mae and Freddie Mac into government conservatorship
- Established the Federal Housing Finance Agency (FHFA) to oversee Fannie and Freddie
- Stabilized the mortgage-backed securities market at the moment it was closest to full collapse
- Reformed predatory lending practices that contributed to the subprime crisis
Fannie and Freddie securitized a majority of all originated mortgages. Without conservatorship, their collapse would have effectively shut down mortgages in the U.S.
The U.S. total homeownership rate peaked at 69% in 2004 and bottomed out at 63.4% in 2016, representing a loss of about 600,000 homeowner households.
While the overall homeownership rate dropped 6 percentage points from 2001 to 2016, Black homeownership declined by 4.8 percentage points, compared to 1 point for White homeowners.
HERA didn’t expand homeownership, nor was it meant to. It prevented the collapse of homeownership post GFC. Realtor.com senior economist Joel Berner speculated on what would have happened to the mortgage market otherwise:
“Without this intervention, the collapse of these two institutions would have effectively shut down the American mortgage market entirely, making homeownership inaccessible to the vast majority of buyers.”
Why Today’s Housing Market Has Another Problem
Today’s housing market isn’t facing a depression or a financial crisis on the scale of the GFC. What it is facing, according to Realtor.com’s housing data, is a supply shortage.
In 2025, the supply gap widened to 4.03 million homes, up from 3.8 million in 2024.
The rising cost of buying a home factors into that, with regulations adding more than $130,000 to a new build and now making up 26.4% of the price tag.
Michael Fazio, executive director of the New York State Builders Association, has some ideas on how to correct this:
“Washington has the power of the purse and should use it to reward states and local communities that embrace responsible housing growth, streamline approvals, and create opportunities for middle-income and working families. Communities that are doing their part should receive greater support for infrastructure, transportation, water and sewer improvements, and other investments that enable housing production.”
Median buyer age for the first-time buyer has climbed from 30 in 1990 to 40 in 2025, according to NAR data. And the delay in homeownership has created another wealth gap: buying by age 30 builds 22.5% more net worth by age 50, making for an average $119,000 more.
Agents are already having conversations about this with frustrated would-be buyers. Knowing the landscape and how to offset rising costs makes you the agent who can make possible what, for many, feels years out of reach.
What the 21st Century ROAD to Housing Act Means for Agents
On Tuesday, June 23, the U.S. House passed the 21st Century ROAD to Housing Act in a 358-32 vote. This widely-celebrated 45 provision bill is aimed at fixing the supply side of the housing crisis.
Among its provisions is $10 million competitive grants for local governments that streamline permitting and zoning for new construction.
It also updates NEPA review timelines and encourages the conversion of vacant commercial buildings into housing.
Here’s how Berner positioned the ROAD Act:
“The bill fits squarely within the tradition of federal housing legislation this report has examined, though it addresses a different category of failure than its predecessors. Where the National Housing Act of 1934 stabilized a collapsing mortgage market, the GI Bill expanded access to credit, and HERA prevented institutional collapse, the Road Act targets the regulatory gridlock that is today’s primary barrier to homeownership.”
Fazio added his own recommendations for federal, state, and local governments:
“The federal government can provide leadership and incentives, states can modernize laws and regulations, and local governments must do their part by removing unnecessary barriers to responsible growth. That’s how we’ll create more housing opportunities and make homeownership and rental housing more attainable for American families.”
For now, the ROAD Act sits in limbo after Trump canceled the signing, choosing to prioritize the “SAVE America Act,” despite the voter ID bill’s filibuster in the Senate.
It’s still possible the ROAD Act will go to the president’s desk and become law. Stay tuned for the update.
