Hey Big Govt. HUD, Homeowner’s Rate is at Record Low … Ever
If you don’t own property, you are property and a pawn in HUD’s AFFH chess game. HUD has not been part of any solution.
WSJ – Homeowner Rate at Record Low
The U.S. homeownership rate fell to 62.9%
By JEFFREY SPARSHOTT
July 29, 2016
The U.S. homeownership rate fell to the lowest level in more than 50 years in the second quarter of 2016, a reflection of the lingering effects of the housing bust, financial hurdles to buying and shifting demographics across the country.
But the bigger picture also suggests more Americans are gaining the confidence to strike out on their own, albeit as renters rather than buyers.
The homeownership rate, the proportion of households that own their home, fell to 62.9%, half a percentage point lower than 2015’s second quarter and 0.6 percentage point lower than the first quarter of 2016, the Census Bureau said Thursday. That was the lowest figure since 1965.
There are many ways to interpret the numbers. Part of the story is the catastrophic housing market collapse, which was especially severe for Generation X—those born from 1965 to 1984.
Younger households, meantime, struggle to save amid student debt, growing rents and sluggish wages, and face a limited supply of starter homes. Indeed, the homeownership rate for 18-to-35-year-olds slipped to 34.1% in the quarter, the lowest level in records dating to 1994.
At 77.9%, the homeownership rate was highest for those 65 years and over.
But the broader picture suggests a degree of economic strength: Renters are spurring a steady increase in overall household formation. Renter-occupied housing units jumped by 967,000 from the same period a year earlier. Overall, household formation has been fairly steady since the early days of the economic expansion.
A rising number of households suggests that more people are optimistic enough to strike out on their own and helps further spur growth as they buy furniture, start families and advance up the economic ladder.
Indeed, moving into a rental unit has been entirely responsible for rising household formation since the recession began.
“Household formation numbers suggest that if the decline [in ownership] is real, it is more likely due to a large increase in the number of renter households than any real decline in the number of homeowner households,” said Ralph McLaughlin, chief economist at real estate website Trulia.
Down the road, many renters will likely look to become buyers, spurring a housing market that already appears constrained by rising prices and limited home inventories.