Scorecard on housing for the last decade: Renter households up 10 million, homeowner households down

[steve2470]

This article is several weeks old, but still very relevant I think.

http://www.doctorhousingbubble.com/renter-households-versus-owner-occupied-data-homeownership-rate/

The current homeownership rate has fallen to where it was two decades ago. The demand for home buying from traditional buyers is simply not there. Recent surveys find that the majority of Millennials would rather rent than buy. This is the group that will need to pick up the slack moving forward should the housing market return to any normal environment. But what is truly normal at this point? Over the last decade we have added 10 million renter households while actually losing 1 million owner occupied properties. The recent buying spree of 2013 and 2014 came in the form of investor demand. Real estate has become simply another speculative silo for Wall Street to speculate on. And many buy it up. Across the nation, home prices with current interest rates seem reasonable with the median priced home running close to $200,000. So why is the trend still pushing towards more people renting? Is this simply a nationwide trend or is this also impacting high cost states?

The growth of rental nation

People are hardwired to look forward. History is for nostalgia and past financial events are for economics classes. It doesn’t surprise me when you look at credit repair forums and people that lost their home to foreclosure during housing bubble 1.0 are eager to jump on the bandwagon once again. Yet the habits that caused the problems back then still exist. One dirty secret that is rarely discussed is the bulk of the 7,000,000+ foreclosures came in the form of vanilla flavored 30-year fixed rate mortgages. People just leveraged too much for the income coming in. A recession was enough to tip the scales. And that is why we now have 1 million fewer homeowners than we did a decade ago:



more at link

[geek tragedy]

1. The more renters, the higher that rents will go.

Don't follow the herd.

[steve2470]

2. I think the overall point of the article was, more people are being forced to rent

That was my take.

[geek tragedy]

5. I'm not sure it took a position firmly one way or another

the article does say that people are hard-wired to be forward-looking. I'm skeptical of this claim--I think a lot of people saw what happened in 2007-2009 and learned the lesson that buying was too risky.

With a barbell shaped population--lots of people too young to own and seniors moving into assisted living--owner occupied housing was bound to drift down eventually. Combined with the great recession hangover, and it makes sense.

When rents get out of whack compared to the price of paying a mortgage, you'll see it shift the other way.

[pinboy3niner]

3. Gives the lie to W's 'Ownership Society'

Give tax cuts to the rich, give 'personal responsibility' to the poor in lieu of a safety net. What could go wrong?

[steve2470]

4. if the PTB had their way, we'd all be renters except for the very wealthy

The peasants have housing, what's the problem ?