Home Values Are Down, and Not Just at the Bank

"The prospect of possessing one's own house," wrote educator George B. Emerson in 1871, "and that a pleasant one, with a garden and trees, and room for the children to play, in safety, must be a strong motive with any man to regularity, good conduct, and economy."

The way our 19th-century forebears saw it, owning a home could shape and improve your moral character. Reformers such as Emerson believed that the home was "the most sacred place for man and for woman, and especially for children" because it developed the Victorian virtues of "truthfulness, industry, order, frugality, reverence, purity, and self-control."

What would Emerson think today? Global investment banks are failing, and mortgage giants Fannie Mae and Freddie Mac, created over the years to support that unimpeachable moral right of homeownership, are on the brink. Millions face being tossed out of their condos and cul-de-sacs. Home, that most sacred of places, is under assault. We have strayed so far from what made owning a home an unassailable American value -- the place where mother could serve that apple pie -- that a modern-day Emerson would probably find today's American homeowner an entirely different breed from the virtuous, industrious man of his day.

What happened to the American homeowner? How did the refuge of home become part of the problem?

From the 1830s on, moral reformers argued that the family home was a key to a Christian life. In a crass and stormy world, fathers would carry out the grubby business of earning money, and mothers would make the home a refuge where the family could pray and grow spiritually.

The virtues of owning one's own sanctuary, and a suburban one at that, stood in contrast to the boarding houses and apartment buildings where many renters lived together. These crowded places, 19th-century reformers thought, lacked the sort of privacy needed to raise children well. And they offered sexual temptations. Reformers recoiled at the thought of single men mingling with single and married women, a situation they were sure would inevitably lead to the opposite of purity and self-control.

Owning a home was also a way to spread Americanism. "The man who has a home," wrote architect Samuel Sloan in 1871, "feels a love for it, a thankfulness for its possession and a proportionate determination to uphold and defend it against all invading influences. Such a man is, of necessity . . . a good citizen; for he has a stake in society."

Homeownership offered a way to inculcate loyalty to the United States among foreign immigrants who, reformers felt, threatened to undermine the Republic. "Give us a nation of homes, with each family loving and beautifying and developing its own," wrote the editor of the American Home magazine in the 1920s, "and there will be small need for teaching patriotism."

Fortunately, many immigrants needed no convincing. For the peasants of Europe, the ownership of a little patch of land with a home meant security and shelter. Philadelphia, with the help of its workingmen's savings and loan associations, provided so many houses for immigrants and the native-born to buy that by the late 19th century it was known as the City of Homes. In Chicago, entrepreneur Samuel E. Gross sold thousands of house lots and cottages to German and Irish immigrants. Everywhere they could, immigrants and working-class families scrimped and saved to put down money on a little house of their own.

Nonetheless, most Americans couldn't afford to buy a house. As the United States entered World War I, only around 45 percent of Americans owned their own homes, and many worried about the social cost of not housing the nation's workforce. "We are learning," wrote the architect A.D.F. Hamlin in 1918, "that a healthy, happy worker in a decent home is worth more, both to the State and his employer, than one who is an unhealthy, unhappy wanderer from one factory and slum to another."

In response, the federal government launched an educational campaign, "Own Your Own Home," using local volunteers and model-housing exhibits. When he became secretary of commerce in 1920, Herbert Hoover expanded the program by holding dozens of housing conferences with local industry representatives and promoting mass distribution of "Own Your Own Home" pamphlets. He also supported the Better Homes in America movement, started by Marie M. Meloney, editor of Woman's Magazine, who rallied women with the slogan "As is the Home so the Community and the Nation." In 1928, Hoover ran for president, rejoicing that homeownership had grown and that his efforts had helped improve the American home, "the sanctuary of our loftiest ideals, the source of the spiritual energy of our people."

The next year, this early nationwide housing bubble began to burst. In the 1930s, the United States sank into the worst economic depression it has ever experienced. Empty and abandoned house lots blighted the countryside in "premature subdivisions" where the expected homebuyers never appeared. Worse, the number of foreclosures on mortgages soared, reaching 1,000 a day. Hoover and his successor, Franklin D. Roosevelt, both fervently believed in homeownership, but Americans were losing homes, not buying them.