Want more Americans to own homes? Stop taxing them while they save for one.

America has a housing crisis.

Owning a home has long been one of the most basic pieces of the American Dream: work hard, save your money, buy a starter home, build equity and have something that is actually yours. For a growing number of young Americans, that dream is getting pushed further and further out of reach.

Home prices are up roughly 60 percent nationwide since 2019, while existing home sales have fallen to a 30-year low. Harvard Joint Center for Housing Studies

And look at what is happening to first-time buyers.

According to the National Association of Realtors, first-time buyers accounted for just 21 percent of home purchases in its latest survey — the lowest share ever recorded. The typical first-time buyer is now 40 years old, also an all-time high. National Association of Realtors

We are getting to the point where buying your “starter home” is becoming a middle-age milestone.

The Federal Reserve paints a similar picture: only 24 percent of Americans ages 18 to 29 own their homes. Federal Reserve

Something has to give.

There are a lot of reasons housing has become so unaffordable. Supply, interest rates, zoning, construction costs, property taxes and insurance all matter. There isn’t a one-size-fits-all policy that is going to fix all of it.

But there is one very simple thing we could do to make it easier for young Americans to save enough to actually get through the front door:

Stop taxing the money they are setting aside for their first home.

We already encourage Americans to save.

This isn’t a radically new concept. We have 401(k)s and IRAs for retirement, 529 plans for education and Health Savings Accounts for medical expenses.

And now we have Trump Accounts.

Under the Working Families Tax Cuts, parents and guardians can establish Trump Accounts for children, and eligible American children born between 2025 and 2028 can receive a one-time $1,000 federal contribution. Internal Revenue Service

There’s a very American Dream philosophy behind that idea: start young, save early and give Americans an ownership stake in their own future.

So why stop there?

One of the biggest purchases that child will eventually make is a home.

Why not give Americans a tax-advantaged way to start saving for that too?

Give Americans a First Home Savings Account.

Congress should discuses the creation of a First Home Savings Account specifically for Americans saving toward their first home.

The concept could be simple. You decide that part of your paycheck will go directly into your First Home Savings Account. Because you’ve committed that money toward purchasing your first home, the contribution could be tax-free, grow tax-free and eventually be withdrawn toward a down payment. The exact framework can be debated. The idea is what matters.

The question is what we do about rising home prices?

Instead of another federal subsidy that lowers the barrier to entry but can drive up demand and add to the national debt, why not help Americans keep more of their own money while they’re saving for a home?

That’s what makes a First Home Savings Account different. It isn’t giving someone money to buy a house. It’s letting them keep more of the money they earned to save for one.

Why are we taxing the down payment before it even becomes a down payment?

You earn money. You pay income taxes on it. Then you take what’s left and try to scrape together a down payment.

Once you finally become a homeowner, there will be plenty of taxes, fees and other costs waiting for you.

Do we really need to tax the money while you’re trying to become a homeowner too?

Instead of taking a portion of it in federal income taxes first, let those dollars stay in the account and eventually go into the housing market.

And why wait until you’re 25?

We could go even further.

Parents or grandparents could help establish an account when a child is young. A teenager with a summer job could start contributing. Once that young person enters the workforce, contributions could automatically come out of every paycheck. Or even a future employer who wants to encourage local longevity.

Imagine entering adulthood knowing there is already money growing toward your first home. Instead of turning 30 and suddenly realizing you need $40,000, $50,000 or more to make homeownership work, you could have spent the previous decade building toward it.

That’s helping the next generation a start toward achieving the American Dream of homeownership.

We don’t have to reinvent the wheel.

Canada already has a version of this idea with the First Home Savings Account allowing eligible first-time homebuyers to make tax-deductible contributions to an account specifically intended for purchasing a first home. Under the current system, Canadians can generally contribute up to $8,000 per year, with a $40,000 lifetime limit. Qualifying withdrawals used to purchase a first home are tax-free. Canada Revenue Agency

We don’t have to copy Canada dollar for dollar. America can build its own version.

The details can be debated, from contribution limits to what happens to the savings if someone never buys a home.

If you’re willing to save for your own first home, the federal government shouldn’t make it harder.

A First Home Savings Account won’t fix America’s entire housing crisis.

It won’t magically turn a $500,000 house into a $300,000 house. It won’t build more homes, fix zoning, or bring down the cost of lumber or insurance. But it will address some of the barriers to entry our younger generations now face.

There is no single solution to America’s housing crisis, but homeownership remains one of the most important ways American families build stability, equity and generational wealth.

We should want more Americans doing it, not fewer.

A First Home Savings Account is one way to help Americans save their own money toward their first home without Uncle Sam taking his cut first. We’re already going to tax them plenty over a lifetime of homeownership. We can at least give them a tax break while they’re trying to get there.