Posted on 10/07/2011 9:40:36 AM PDT by Signalman
NEW YORK (CNNMoney) -- The percentage of Americans who owned their homes has seen its biggest decline since the Great Depression, according to the U.S. Census Bureau.
The rate of home ownership fell to 65.1% in April 2010, 1.1 percentage points lower than it was in 2000. The decline was the biggest drop since the 1930s, when home ownership plunged 4.2%.
The most recent decade-over-decade drop, however, only tells half the story.
Home ownership during the 2000s "was really high in the middle of the decade, up to almost 70% at one point around 2004," said Ellen Wilson, a survey statistician with the bureau.
The crash from that peak was more than 4 percentage points in just about five years -- a far more dramatic decline than the 1.1% drop over the 10-year period.
(Excerpt) Read more at money.cnn.com ...
Following 10 years of gov’t promotion of lending to the unqualified borrower, isn’t this the expected result?
If we are going to say on one hand that too many loans were made to unqualified borrowers in the early-middle of the 2000’s, and that this widespread practice led to all the banking crap we’ve gone through over the past 3 years, then we should WELCOME these types of numbers because it is an indication that “the fever is dimnishing”.
Don’t get me wrong, I’m not denying that snapshot-view of the “drop in homeownership” is as a result of millions of people being forced out of their homes and all the heartbreak this whole saga involves. But most of those people shouldn’t have been homebuyers in the first place.
It is unfortunate that the frenzy of the housing market produced such pain, dislocation, and probably economic depression that IMO will be with the US for a solid decade. But the way of the world is more often than not the crap falls down to the little guy.
We lost our home last year and are renting now (boo-hoo for me..I know). Frankly, I have no desire or intention of buying again in the foreseeable future. Think I’ve gone a tad nihilistic, as a thirty year loan on something seems irrelevant...
There are a number of problems with this particular statistic.
The first one is probably the assumption that nearly everyone SHOULD be a homeowner - as if by some natural right (otherwise why determine the number in the first place).
The second problem is in how the number is composed - it may be close to the actual number but the data it draws on is not precise to begin with.
A third problem is how everyone imagines this number - as if the 65% is the same static group of people every time it’s reported. It’s not. Besides those who can simply “not afford to buy a home”, there are people who by age and life circumstances - the young just entering the workforce and the elderly at “the last years of life” - are adults for whom life circumstances alone either keep them or take them out of the ranks of “homeowners”.
For the younger adults it is only natural in this post-housing-boom-to-bust economic cycle that reaching “home ownership” has and will be “delayed” longer than when the economy is growing well. Jobs, not “housing” is what they need. Jobs has to come first. When it does, “housing” will follow.
And, the demographic aging of the population does not stop just because (and whether or not) the economy is not doing well. The numbers of moves from “home owner” to living with their kids, or to an “assisted living” venue, or to a nursing home will likely grow during the decades the bulge of baby boomers continues to age (and “depressing” the number of “home owners”).
And lastly, maybe “full home ownership”, like full employment, is an unrealistic idea and goal to begin with.
Everyone who has owned a home knows that at the end of the day (when the mortgage is paid off), they may have ownership of some equity value in their home, that they would not have had as a renter, but getting there - mortgage, utilities, property taxes, insurance, maintenance, improvements - was not less cost - during the process - than the rent and utilities cost for many renters.
Just maybe, not being a home owner is just as justified, economically, for some people (at some time or even always) as home owning is for other people.
How about we let organic economics work and take the “home ownership” statistic for what it is - an interesting number, with many underlying causes but possibly not something to be overly alarmed about. It is a result. It is not by itself a cause. Repair the cause (primarily jobs) and housing will follow to the extent it can. But don’t expect EVERYONE must become a homeowner; as something that MUST reflect what everyone’s economic situation SHOULD provide. That is most likely neither realistic or needed.
Excellent post!
The first of the Baby Boomers are 65 now. Watch real estate, as most of us Baby Boomers fall into seniors’ apartments and graves for the next 20 years or so. Wait a long time before buying back in cheap as dirt, and push property taxes down to where they belong. Shut down public education in favor of private education, too, because we didn’t have many kids.
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