More Americans are chosing to rent
The U.S. home ownership rate continues to fall:The number of Americans who own homes fell in the second quarter of the year to the lowest level since 1999, said a government survey released Tuesday.
The Census Bureau said the home ownership rate fell to 66.9% in the second quarter of 2010, down half a percentage point from the previous year. The home ownership rate was 67.1% in the first quarter of the year.
And renting is becoming more popular:With homeowner markets stressed, it appears renting has become more appealing than owning. Between 2004 and 2009, the number of renter households rose nearly 10% or by 3.4 million, according to a 2010 study of the Joint Center for Housing Studies of Harvard University. The rise was most dramatic in the Midwest, where growth of renter households swung upwards by 15.4% between 2004 to 2009. The South added the biggest number of renter households with a 1.2 million increase from 2004 to 2009, the study states.
All that has made Capitol Hill rethink its definition of the American Dream. As recently as the Clinton and George W. Bush administrations, the mantra of homeownership was almost synonymous to civic duty, but top policymakers now say that homeownership isn't necessarily good for everyone.
In May, U.S. Housing and Urban Development Secretary Shaun Donovan testified before a House committee that the financial crisis proved the need for a better balance between ownership and rental housing. And HUD senior official Raphael Bostic last week told the Washington Post: "In previous eras, we haven't seen people question whether homeownership was the right decision. It was just assumed that's where you want to go," Bostic said. "You're not going to hear us say that." ...
"The government shouldn't blindly encourage homeownership," says Joe Gyourko, real estate finance professor at University of Pennsylvania's Wharton School. "If the government does anything the government should encourage people to make the right decision."
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This is very good news.
ReplyDeleteIndividuals should rent only what they can afford, and continue doing so until they have the downpayment (at least 20%) and fiscal discipline necessary to take on the responsibility of a mortgage.
Renting also makes sense for people just starting out, who may end up moving, or needing a larger space for family reasons, etc.
ReplyDeleteRenting means fewer Americans own private property, which is fundamental to the US Constitution -- we have legal rights only because we own private property.
ReplyDeleteWatch as this trend continues, and also pay attention to how much news media this receives and how every news article says it's a good thing.
"nonpartisan said...
ReplyDeleteFirst of all, I agree that we need to adjust for inflation - and since we are in a period of deflation that Bernanke and Co. cannot stop, we can add -1-2% inflation effect. Agree!
and sure, Ill give you my predictions:
Nov '09 - 165
Nov 2010 - 145
Nov 2011 - 125
Nov 2012 - 112 (and new president)
Nov 2013 - 100
THEN we can start talking about the bottom.
W.A.L (watch and learn)
August 18, 2009 9:11 PM"
++++++++++++++++++++++++++++++++
PREPARE children PREPARE!!! The great and all knowing NONPARTISAN has spoken and he says DC prices will hit 145 by November of this year!!!
Nevermind that he whiffed on his Nov 2010 prediction - that was meant to fool the nonbelievers - this one WILL come true.
Since we are at 182 (May 2010), that means we are about to see 6 straight months of SCORCHING PRICE DECLINES, FAR WORSE THAN ANYTHING SEEN TO DATE!!!
Doubt him at your peril. Instead, sit back and W.A.L (watch and learn).
ah - thank you so much - I had not saved that thread and now I have it. Again, these were predictions and nobody can hit every data point for right value at right time. However, I stand firmly by the end result (i.e. CS no higher than 100, when all the gas is finally out of the bag). around 2013 still looks on target.
ReplyDeleteThanks again!, and--
W.....A.....L
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ReplyDeletenot only is it good for those who have been encouraged to buy when they aren't ready, this hopefully will prevent artificial demand and inflated prices for those who are ready but don't want to buy into an overpriced market.
ReplyDeleteHomeowner here (bought in 2003): I just like listening to nonpartisan's ceaseless prophecies of doom. The fact that they're always wrong doesn't diminish them in any way.
ReplyDeleteRepent, the End is Nigh! Your penance will be a great portion of bitter herbs and castor oil. That and massive deflation!!!
False Dilemma / Bifurcation Fallacy
ReplyDeleteThe bifurcation fallacy is committed when a false dilemma is presented, i.e. when someone is asked to choose between two options when there is at least one other option available. Of course, arguments that restrict the options to more than two but less than there really are are similarly fallacious.
Examples
(1) Either a Creator brought the universe into existence, or the universe came into existence out of nothing.
(2) The universe didn’t come into existence out of nothing (because nothing comes from nothing).
Therefore:
(3) A Creator brought the universe into existence.
The first premise of this argument presents a false dilemma; it might be thought that the universe neither was brought into existence by a Creator nor came into existence out of nothing, because it existed from eternity.
Another example emerged when George W Bush launched the war on terror, insisting that other nations were either for or against America in her campaign, excluding the quite real possibility of neutrality.
"Partisan said...
ReplyDeleteBesides, Im also anon and I rent, which is why I come back here and argue. Do you think a home owner, who is happy with their purchase, actually reads a blog like this??"
Anonypussy - NICELY DONE! I was wondering how long it would take before someone sockpuppeted me and forced me to take a real ID name on Blogger/Gmail. Kudos to you.
Anyway to answer your question/statement, I was gonna lie and say I wasnt worried, but fact of the matter is, I am. I bought a few months ago, right into the teeth of this downturn, and it was ALOT of money - who in their right mind would not be worried!
As to being happy, trust me, I am. I love the place I bought. Thats not why I post. I post because my work has its slow periods, and I like to take my free work time to torture people like yourself, Noz & Nonpartisan. Thank you so much for providing endless hours of entertainment!
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ReplyDelete**Someone** has to own the houses that renters rent and investors aren't going to lose money on their rentals. As demand for rentals increases, purchase will become more attractive again and the market (if left alone) will find its equilibrium. As a renter and former homeowner, I'm just waiting things out -- prices in my area are still higher than I want to pay. But if my rent were to keep going up....
ReplyDelete