By Josh Baker, Co-Founder of Fraction

The central problem of housing is simple: it costs too much. Whether that is due to NIMBYism, housing policy, or a glut of foreign investment, everyday people are facing down the prospect of never being able to enter the property market.

This isn’t the first time that this has been the case. Although there was an explosion in homeownership rates in the mid-to-late 1900s and early 2000s, for much of human history this wasn’t the norm. Before the 1930s, only 40% of American households owned homes.

The introduction of the modern mortgage fundamentally changed the homeownership landscape. With policies introduced by the Federal Housing Administration in the 1930s, the number of households owning their homes steadily grew, peaking in 2005 at nearly 70%.

But the trend has reversed. Accompanying housing crisis headlines all across North America is a significant drop in homeownership rates. In 2016, homeownership in the United States fell to 63% — the lowest in half a century.

Homeownership rates as reported by the US Census Bureau

We need a new solution. The mortgage model that had worked so well for us for the better part of a century has begun to falter.