Posted on 04/30/2013 11:20:05 AM PDT by whitedog57
The US Census Bureau reported earlier today that the US home ownership rates in the first quarter of 2013 dropped by another 0.4% to a fresh 18 years low, or 65% – the lowest since 1995.
This is somewhat surprising given the relative affordability of housing.
And The Fed’s unprecedented purchase of Treasuries and Agency MBS in an attempt to stimulate the housing market.
And according to Loan Performance, house prices have really been humming since early 2012. Shortly, we will hear the clamor for “getting on the bandwagon” with low down payment mortgages. Like Navy Federal Credit Union.
Could tight credit be to blame? Or lack of consumer confidence? Consumer confidence has not been above 80 since 2007.
Friggen hilarious.
Hey Ben “I Need Some More Cowbell” Bernanke!
How’s that Q.E. VIII working out for you?
Home prices are rising. But, not because families are buying. Individuals are scooping up existing homes and turning them around for a profit or renting them out.
I would like to see the figures on Home Ownership to reflect the homes that people actually own, not the ones that they are buying back from the bank. What would that be? One percent?
These figures actually say that 35% of the population will not or can not borrow to buy a home. I also wish they would use the right statistic for the right purpose. Kinda like the Unemployment figures. Just give me the Employent figures, that is truth. How many people are in the short term job lost government insurance program is not “Unemployment”.
How many people don’t have jobs is Unemployment.
From a MacArthur Foundation study released yesterday:
There remains a strong desire among Americans to own their own home – in fact, more than 7 in 10 renters aspire to own one day.
However, the overall appeal of renting versus owning is changing. 57% of adults believe that “buying has become less appealing,” and by nearly the same percentage (54%), a majority believes that “renting has become more appealing” than it was before.
With families and communities still reeling from the boom-and-bust cycle of the past decade, the public is recognizing that owning is not the only acceptable option, and the sense that renting is somehow undesirable appears to be fading. In fact, nearly half of current owners (45%) can see themselves renting at some point in the future.
After decades of equating home ownership with the American Dream, in the aftermath of the housing crisis, 3 in 5 adults (61%) believe that “renters can be just as successful as owners at achieving the American Dream.” This sentiment is broadly felt, among owners (59%) as well as renters (67%), and across all regions of the country.
Too busy paying for health care and can’t afford bugger all, me thinks.
What a laugh. People aren't mindless animals that spend every cent they have in response to the Fed shoveling easy money and low rates at them. Housing is not "affordable" if you are worried that you might lose your job, or that your health insurance premiums are about to go through the roof, or if you see the price of gas and food skyrocketing. Individuals are doing what businesses are doing -- hoarding cash because they know the economy is still in the crapper and have no faith its coming out any time soon.
It doesn’t matter how cheap homes get, when people don’t have jobs.
Raise the import tariffs and put American’s back to work.
Quantitative easing isn’t helping people who are out of work buy houses.
The hidden factor there is that with the uncertain labor conditions (let go at the drop of a hat), people want to be able to quickly relocate to another area and prefer to rent in order to be flexible.
Just refinanced my 3000 SF home. Monthly payment, with insurance/taxes/PMI is $1500. My home has 4 BR and 2.5 BT.
The closest thing I can find to rent is a 4 BR / 2 BTH 2700 SF home in a not great neighborhood for $1800 per month. Most homes like mine in decent neighborhoods are renting for over $2300 per month.
Renters are fools, at least in our area...
Rents are higher than mortgage rates and they have been for a while now... I never said they were smart ;-)
A lot has to do with Gen Y (Millennials) who don’t value home ownership like Baby Boomers and Gen X’ers. They are fine with renting...stupid though it may be :-)
Here is one of the reasons:
http://www.washingtonpost.com/blogs/wonkblog/files/2013/03/median-income-800x540.png
Our son and DIL just bought their first home (actually we sold them our home and moved to another home we owned.) We gave them a low price because they’re our kids :) and the loan officer suggested raising the price and gifting them the equity. So that’s what we did, on paper it looks like they paid more for the house than they did. Result for them instant equity and no PMI, result for our neighbors, doesn’t lower their appraisal rates, and for us, gifting them the equity is perfectly legal and was no loss to us since we received the amount we had agreed upon.
But the great deal is that the mtg. rate was below 3.5% on a fixed mtg. and their mtg payment plus insurance and taxes was lower than their rent had been (in our area rental rates have remained the same, even when house prices were falling.) When we bought our first home, rates were around 10%. Right now house prices are rising in our area, how long that’ll last, who knows. but you sure can’t beat the interest rates.
the point is,
many of the defaulted homes are being held back from resale
and
those that are being put on sale, many are being bought up by the many immigrants (mostly from Communist China, many buying for cash)......
and many more are beginning to be purchased in bulk by the 4 or 5 “vulture capital” investment firms, to be turned into mass rental operations
there is no practical way for a regular working American (if there are any of those left, what with the Great Obama Recession).... to purchase.... against all-cash bids from both of the above sources
so, home ownership continues to sink
QE would normally help them get jobs, by making business investment's cheaper. But we can't invest fast enough to offset the jobs leaving out the back door due to stupid trade policy.
In fact, I'm thinking that QE may actually be helping to fund offshoring.
I'm not against QE, it's the right monetary policy given high unemployment. But without fixing the fundamental problem that caused the unemployment in the first place, QE is a bandaid on a cancer.
One of the common misconceptions is that the gain in housing demand owes primarily to investors and international buyers. In Q1, investors made up about 22% of sales, which is close to the average since mid-2010. International buyers made up about 2% of sales in Q1, which again matches the historical average over the past three years.
Primary homebuyers are still the largest share of the market, by far. However, the constraint for primary homebuyers is tight credit conditions. This has resulted in a greater share of all-cash purchases. Over 20% of buyers who are looking to relocate (turnover) and 60% of second home buyers use only cash. First-time homebuyers are still reliant on financing as only 11% of sales are all cash among this cohort. And of course, the most extreme is investors and international buyers where about three-quarters of purchases are all-cash. All together, about a third of sales are made without financing. As credit conditions gradually ease, which we anticipate, the housing market will open to a wider range of buyers, particularly first-time owners.
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