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US Homeownership Rate Drops To 1983 Levels: Here's Why
The last time US homeownership declined down to 64.4% (which the Census Bureau just reported is what US homeownership declined to from 64.7% in Q2), was back in the fourth quarter of 1983.
It goes without saying that this is about the bearishest news possible for those few who still believe in the American homewonership dream.
Of course, those who have been following real-time rental market trends would be all too aware there is no rebound coming to the homeownership rate. The reason is simple: increasingly fewer can afford to buy, instead having no choice but to rent, which in turn has pushed the median asking rent to record highs. In fact in the past two quarters, the asking rent was just $10 shy of its time highs at $756 per month.
But capital allocation preferences aside, while explaining the disparity between rental and homeownership in a world where Renting is the new American Dream, what the charts above don't explain is why there is no incremental demand from all those millions of young Americans who enter the population and, eventually, the workforce. At least on paper.
Earlier today, Bank of America in its Chart of the Day earlier was confused by precisely this:
Population growth of 25-34 year olds outpacing growth in the housing stock: The primary driver of household formation is population growth among 25 to 34 year olds. There is notable divergence with the growth in this age group and the growth in the housing stock. This suggests greater doubling up of households as a result of the recession and weak recovery. Unless doubling up turns into tripling up, household formation should recover over time, creating a need for greater building. Given tight credit conditions, this will tend to drive apartment construction more than single family construction. Either way, the housing stock is lagging well behind demographic fundamentals.
Yes, in theory, in a normal world, demand should increase over time. But the world is anything but normal.
Enter: the Millennials.
For the benefit of a very confused Bank of America, and everyone else who missed out weeked chart porn on the financial state of the Millennial, here are some of the key charts which explain why owning a home in the US has become a mirage for an entire generation of Americans. Incidentally, the largest generation in US history.
This is what is happening:
And this is why:
Bottom line: they may be homeless, but Millennials sure love their smartphones...
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There is a house near me that I know has been sitting empty for over 5 years, bank owned.
So I sold my home about 10 years ago and have been renting since. Turn the key and go. No worries about roofs, lawns, repairs, taxes, insurance, or losing 50% of my money.
I will probably buy again though in the next few years, as I do want the stability owning a home has. Rents have gone up substantially in my area due to inventory shortage and I'd like to be able to set down roots and paint the walls whatever color I want. Kids will be out of school in 2 years and I can move to a different area that is not so damn expensive to live- need to stay here for the schools.
When I do buy, damn straight and I putting down the least amount of 5% and will roll all the costs into the mortgage. I want as little skin in the game as possible if the shit hits the fan again.
Renting in my area used to be about 50% of owning. Now, not so much. It's about 75% as rents keep going up each year. Banks are holding onto their REO and foreclosed properties for years rather than dump them and take the loss, and are asking stupid crazy prices for them- even though most are infested with mold, bugs, and need repairs.
Most of what people post here is true. This is all engineered to make the majority of people renters to the homes owned by Wall Street and bankers. Used to be you paid 3x your salary for a home. Now it is 7-10 x where I live. What sane person wants that?
I think it's because too many people spending the money on the Kardashian app.
Is it any surprise this has given rise to the "sharing economy"; less "green" than it is out of necessity.
What we need now is for financial institutions to create synthetic investments whereby we monetize old people and our prisoner population so that we can tranche them up and sell them to Iceland. This will be the answer to our problems.
Relax. Actual ownership (not pretend one) has been the same since abolition of Allodial Title in 1763.
Would be really good to add a line to this graph that shows TRUE home ownership, ie. those family (not investor owned) owned residences without a mortgage because in the final analysis, the banks own every fuckin thing until they hand you the deed.
even when the mortgage is paid off, there's forever property taxes. who invented property tax, anyway? or even mortgages for that matter?
With US debt over $17 Trillion, can Federal property taxes be coming next?
Most of the East Coast would plunge into bankruptcy. Property taxes there are already fucking outrageous.
So what you're saying is take the free money, buy the most points, rent it to three's a company (ignore the noise and medical smoke) and be so wrong for 4 years and then be so very very right for the next 26?
Ps I was close when I said the case shipper would be the lead article!
pps I'm thinking warren had good advice when he said 30yr mortgage best way to short the dollar. Just gotta look to the next QE as the race to debase must continue.
why buy a house when MERS can't prove who owns the debt? It just causes all sorts of shit when you get foreclosed.
You DON'T own a home if you have a mortage. Only 3 out of 10 of the "65%" actually own their home. The rest are sharecropper who think they are free.
You NEVER own your home. Try not paying the 6,000-20,000 in R.E. Taxes. School taxes, borough taxes PER ANNUM, or not mowing your lawn to the correct height and see who actually owns your home.'
Home "ownership" is a myth, like "sunrise" and "sunset", or corporations pay taxes.
solid point.
This equation rules the world of economics:
PROFIT = REVENUE - COST
Suppliers want to be paid with REAL GOODS AND SERVICES, otherwise supplies will shrink which is currently under way
Home ownership along these lines is going down because those who can afford to buy a home want far more in a first house than they should get.
I know dozens of young adults who can afford to buy but will not because the kitchen needs updates, it's not in the correct school district, or the lawn is too messy.
I think we can forget about all the reasons above and chalk it up to a bunch of spoiled brats who only want scotch but only have beer money.
Many nice houses go languishing because the buyers are unwilling to put some elbow grease, and sweat equity into their purchase.
It's been a while since I ran the numbers for my country but back when I did ( somewhere around ~ 2004):
In the time it took my wages to increase by 40% (this did not happen to everyone - I was improving my skills at the time), real estate prices went up by 400%. What once cost $100k, now cost $400k. What once cost $200k, now cost $800k.
In the first year that I made $40k income (which was average weekly earnings at the time), the median house price rose from $400k to $440k. I (or any other average wage earner for that matter) could have saved 100% of my wage for that year for a deposit and been no better off.
Mortgage on the cheapest house in the cheapest suburb was equal to the minimum wage. Bear in mind that there were not too many "cheapest houses in the cheapest suburbs" and they would ALL cost a substantial amount in repairs. Back in the nineties you could buy a decent house - NOT the cheapest - for half the minimum wage.
Newspaper ran stats of earnings of different professions. Using the old measure of "mortgage distress" where you are considered "distressed" if you spend more than roughly one third of your income on your mortgage, only doctors and lawyers should be able to afford the cheapest house in the cheapest suburb.
Lazy pricks can always pay someone else to fix the garden or mod the kitchen - unless they're already maxxed out. But if you're gonna pay half to 100% of your wage on the mortgage, why wouldn't you expect everything to be fixed when you move in??? Plus, if you pay half to 100% of your wage on a mortgage, you've just commited yourself to 25-40 years of compulsory over-time. You won't have time to do home repairs.
People have become extremely lazy over the years. I got into housing rental, and investment, 30 years ago. Since then, I've bought foreclosed houses that had all new replacement, double hung, double pane vinyl windows and vinyl siding(even vinyl siding professionally added to the trim of full brick houses) that costs the foreclosed homeowner thousands of dollars. People will borrow thousands of dollars to avoid a few hours of work every five-ten years!
Well what do you expect when the double-income family has become the norm?
http://www.youtube.com/watch?v=akVL7QY0S8A
At least you build reasonable sized houses in the US with room to swing a cat. In the UK new builds are known as rabbit hutches for a reason, smallest room sizes in Europe. If you try to swing a cat in one it would get concussion.
What you are seeing is the pre-meditated destruction of the millennial, by the elite.
They were attacked from birth:
-Poisoned Food
-Poisoned TV
-Poisoned Parents
This will probably turn out to be the sickest generation on record.
Because of population control agendas.
Everything about media , food, and environment to the economy has been engineered to discourage marriage and family formation.
Replace marriage with empty sex.
Replace food with garbage chemicals that destroy hormones and cause chemical imbalances in the body.
Replace music with metronome like repetition of perversions.
Make abortion not only "OK" but encouraged and subsidized by govt....
Brain Wash women into wanting to "work" instead of be a mother.
Etc...
Men are under attack.
Women are under attack but they are brain-washed, so they actually defend their attackers and think that they are being "liberated" pffft... yes because taking a woman out of the home and throwing her into a cubicle where her boss can oogly eye her is "liberating" let me tell you . . .
Its not even really about womens rights, its about the natural order of things, guy works, fathers children mother guides child to adult hood to create the next generation.
The natural order of things has been turned upside down, it has been destroyed.... and This failing generation is the result, the next generation will be even worse, you will have 40% homosexuals 70% unemployment and 10% marriage rates with 0% home ownership within 1 or 2 generations if things continue, but knowing how liberals work on TV / News this will be labeled "progress" because we can't have "true equality" until half the population is gay and unemployed. And nothing against gay people, but you even as a gay person or a person who defends the gay agenda, has to admit when you have a sky-rocketing gay population, it is a statistical anomaly and a freak of nature event, all the male tigers in the jungle do not sit around and hump eachother, if you witnessed that happening at a high % rate approaching say 20%+ of the tiger population you would be forced to start looking for chemical pollution in their environment.
But when it happens with people, its a "good thing", it makes no sense.
My experience with millenials is that they will be the fanatics armed with slogans and ideology.
its all part of the program/brainwashing replace real thought with pre programmed responses and sayings. This is how you have an entire generation that can recite every commercial catch line word for word but cant remember basic things.
a diamond is forever you know...
dont leave home without it. . .
iv fallen and cant get up
etc
these are bad examples but the idea is to program people with generic responses to situations so whenever one of their peers act outside the norm the pre planted response comes out and resets the person back into slave mode like some mass hypnosis where society itself is programmed to blurt out trigger words to keep itself hypnotized and obedient , mk ultra wasnt about Manchurian candidate's it was probably about studying how the elite can get society to self hypnotize and self trigger using key trigger words planted by tv into the subconscious at appropriate moments as an automatic response to an undesired behavior.
Think about it ...how many times do you see people typing "lol" and they aren't actually laughing or even smiling? probably some elitist out there that hated laughter and decided he was gona find a way to "change the language" so that people typed their laughter quietly instead of actually laughing.... so "LOL" was engineered into the culture. The language is a weapon.
The American Psychiatric Association dropped it in 1973, just two years after gold standard was abandoned.
'Since the 1970s, the consensus of the behavioral and social sciences and the health and mental health professions globally is that homosexuality is a normal variation of human sexual orientation, while there remain those who maintain that it is a disorder.[2] In 1973, the American Psychiatric Association declassified homosexuality as a mental disorder. The American Psychological Association Council of Representatives followed in 1975.[3] Thereafter other major mental health organizations followed and it was finally declassified by the World Health Organization in 1990. Consequently, while some still believe homosexuality is a mental disorder, the current research and clinical literature demonstrate that same-sex sexual and romantic attractions, feelings, and behaviors are normal and positive variations of human sexuality, reflecting the official positions of the American Psychiatric Association and the American Psychological Association.'
TPTB have been working for this for 40 years. Back then, you had fools running around saying people were going to starve to death due to population growth. They never mentioned that those people were fed as they grew up! If everyone 'fags up', then they profit by not having to share GDP. It was planned, of course.
Wow...that is about the most depressing group of charts yet.... we are beyond fucked.
Who the hell gets married, anymore? There is absolutely no reason for a man to marry, unless starting a family is his goal. With the feminised, masculine women out there, who wants them for anything but casual sex?
The women are all masculine, and the "easy" ones are all "gangsterified". (its a real turn off)
The "good women" who are still feminine and don't act like a piranha are the result of the few who grew up playing with Tea-Cups and Dolls.
Now, you see Dolls being replaced with Game-boys, Nintendo Wii and such and Women grow up practicing COMBAT instead of Tea-Time and taking care of dolls.
you see a Female child used to grow up watching her mother take care of her little brother/sister and the child would pick up instinctively the act of motherhood.
That has been destroyed and now Boys and Girls say for the past 20 years pretty much grew up playing with the same toys (gameboys etc).
So the role of motherhood has been completely erased as a choice for women who are growing up, not only that women in the 20's something right now DETEST THE IDEA of having children, and its not even because they want to go out and work and start a career , its because they have been TAUGHT that having children is a form of failure.
While the guys are just sitting around and don't care much because they essentially get free sex all the time.
Really its a war on women its a war to erase what a real woman is.
If you are a woman, and you are not a mother, you have no purpose on this planet, just as if you are a man and you have not fathered children you have accomplished nothing on this planet.
The entire point to life is re-production.
None of the Popes have accomplished anything?
There are over seven billion humans already. People who would be good parents should absolutely be encouraged to have kids. To tell everyone, en masse, that if they don't reproduce they have accomplished nothing, is both untrue and has some really bad results.
Oh please. There are plenty of reasons for young people to marry including, but not limited to, reproduction.
Haven't you ever loved someone and want to be with that person forever? Partners in life? Two become one? Stronger and better together than apart? Buddies in old age with memories shared?
There are plenty of feminine women out there. Get new friends.
In a world of no fault divorce those points mean nothing. Once married, a man has entered Uncle Sam da Pimp's world. Whenever the woman gets mad, and she will, Uncle Sam da Pimp will 'knee cap' the man with divorce proceedings. Women have been trained since birth, by the MSM, that divorce is an option whenever they wish! No sane man will marry in this world. Hookers are dirt cheap in comparison.
You don't need to sign a piece of paper or put yourself at the mercy of the legal system in order to hang out with the one you love forever. The only reason for marriage is to ensure the burden of raising the children is equally shared with those responsible. Why do you throw a party and invite all your family and friends to witness your marriage? So they can witness you both promising to help each other and to look after the kids. So if either hubby or wife decides to shun their responsibility then the whole village can hold them accountable. Well, that's how it's supposed to work, anyway. If no-one had kids, why would it matter who fucked who and how many??? (Okay, also in order to minimize VD transmission).
Marriage without children is a waste of time and a legal nightmare. Err, marriage with children is also a legal nightmare, but I think you get what I mean.
Home Ownership?
That is what they want people to think! With sayings such as:
Get on the housing ladder
The American Dream
Own your own home
When it should be more like DEBT ownership.
Get a housing millstone
The American Nightmare
Owe all your LIFE
All of this with the housing/financial markets screams marxist communism. I say this because what is the main goal of communism? One world government. No nations, no borders or towns. This can be achieved via an Oligarchy with a UN blessing yes? Financial oppression by the control of money and we all know the quotes from certain people regarding, "i care not who makes the laws, just give me control of their money", because its about control of all people by a few yes?
Second is the abolition of property in land and application of all rents of land to public purposes. What better way for the banks to own all housing is to get big gov'y to give loans to people who could never afford them just to buy them back at a cut rate while ensaring others who could afford homes, just not the ones they dreamed about. Thin Freddie Mac and Fannie Mae which were GSE's.
Not only did this create foreclosures galore, it created a contagion to the banking sector, along with legislation that took away the protections from the banks and financial institutions, that allowed a Central Bank to make the final blow to free markets, if there were ever any, to the fifth plank of the communist manifesto.
Confiscation of property of all emigrants and REBELS. Think Finanacial reform ;Dodd/Frank, Patriot Act. The Stimulus bill, Obolacare.
Establishment of industrial armies especially for agriculture. Think organic foods.
Combination of education and industrial production. Free edication for all children.
Extensions of factories and instruments of production owned by the State.
Gradual abolition of the distinction between town and country by a more equitable distribution of the population over the country. Need cheap immigrants to fill the jobs the government destroys in the private sector.
You grind the middle class between the milestones of inflation and taxation.
Vladimir Lenin
Well, you’re close.
It first appeared in our history books as feudalism: all land owned by military officers (historically known as the ‘nobility’), and, of course, all rents dedicated to support of military purposes, like suppressing rebellious serfs.
It was rather messy for centuries until that, while a 1000 serfs could be kept in subjugation with 200 soldiers, it was learned that 15,000 could be subjugated by one priest.
So, they invented a religion that had an invented god own all land, all creatures and all bodies of water. The military then, in conjunction with the priesthood, were appointed as god’s managers on earth.
Initially, however, their religion aimed to subdue six nations, or tribes, according to the law of Abraham; later, the Law of Moses extended their duty to “all nations”. And, the military was supplanted by the “chosen ones” who infiltrated and directed the military. As they went from nation to nation, they first corrupted it by sleazy sex, dope, and pornography; this effectively disarmed the nation and made it easier to deprive the natives of their land and reduce them to mere talking farm implements, or exterminate them if they questioned the sacred duty of tax collectors.
Their general policy should be known as collectivism, which goes by many names: feudalism, communism, Nazism, cronyism, socialism, gangsterism, One World Order, monarchy, fatherland et cetera.
This nation of destroyers has been continuously perpetrating genocides and general plunders for at least 5000 years; historians first notice it in a fully developed state 4000 years ago; so we must attribute another 1000 years to reach that level.
As near as I can tell they were first known as Elamite money lenders and merchants; then Babylonian priesthood, money lenders and merchants, and, mask by mask, by the name Judeo-Bolsheviks today. If you read this linked article, you should have your Bible handy, otherwise you won’t believe what you read.
Man i miss ------------- > http://anotherfuckedborrower.blogspot.ca/
http://bubblemeter.blogspot.ca/
suffered from blogger burnout I think
Multi house hold apartment blocks abound in my daughter's new home town. While the older part of the river city sports beautiful homes built from the 1900's up to World War II, and several new upscale areas with McManisons were built in the boom, hidden alongside industrial areas, shopping malls, and behind noise screens on the ring roads, are countless apartment complexes, most seemingly scaled to 30K a year incomes. That is often husband and wife incomes for young people. Look arounf carefully and the apartment building boom is evident. I drove into a few and looked around. While nice from the outside, the cars, motorcycles, toys and junk are all indicative of a just above trailer park level.
Trailer park = more privacy. I've lived in both. Exact same class, working poor, except Section 8 apartments. That's for the useful idiots (Dem. voting base).
I'm not sure I'm reading the graphs correctly, particularly the one entitled, "Good For Old, Tough For Young."
It seems that the younger generations have had MORE income then less, when compared to the older generations. So, when we were all under the age of 24 years, those who are, today, 30s and 20s, had more income than oldsters of today -- is this correct?
To me, it looks remarkably consistent. People make more money as they age... duh. I suppose those born in the 1940s, early boomers, had it best when they were in their 30s, but that advantage seems to disappear.
Anyway, perhaps I'm missing the point of this particular graph, but I don't see any reason for kids/young adults to be whining. They aren't drafted for war. They aren't selling apples on the street corners of Manhattan. Etc.
http://www.youtube.com/watch?v=akVL7QY0S8A
It seems that the younger generations have had MORE income then less, when compared to the older generations. So, when we were all under the age of 24 years, those who are, today, 30s and 20s, had more income than oldsters of today -- is this correct?
Credit card debt for this group is also at a record high --- designer overpriced clothing, eating out at mostly 'trendy' restaurants every night, & of course the Iphone bill & high speed internet & student loan payment.. Not much left for housing payment let alone closing costs + costs of owning a home
I was just driving around my West Coast city (not in Cali) and wow are there a lot of "for sale" signs in front of single family houses. Driving around a little residential part of town there were at least 20, sometimes 2 or 3 bunched up together. Some were houses "as is", others had clearly been "flipped" and renovated, and were now for resale.
Meanwhile all around town big blocks of 4 story apartments are springing up like mushrooms, for all of those renters out there.
Hmm, houses can't be given away, while apartments are in searing demand. Around here, at least, all of ZeroHedges' analysis on this topic is very visible to the eye.
Me and wife own a couple Midwest state capitol SFH rentals....Best investment we ever made.
We just closed on a studio beach condo in Rincon PR....closed at 52% of asking price. Couldn't buy a new SUV for what we paid.
We are currently renters in NYC. Love it mostly....but thats only for couple more years....then we're fuckouttahere....for the last and final time.
Now looking at these USDA places upstate....I'm thinking it's about time to consider go long sharecropping. ;)
But....Ecuador looks nice. So does Panama if you are high enough to avoid the humidity. But we're Americans so probably not....Would rather go to a big sailboat....and we might.
My point....home ownership is overrated....but RE is still a decent investment....especially considering the options. And I'm higher than Jesus right now. Salut'!
PS....1983 was a GREAT YEAR!!
nstead having no choice but to rent, which in turn has pushed the median asking rent to record highs. In fact in the past two quarters, the asking rent was just $10 shy of its time highs at $756 per month.
Where & what can you rent for $756 a month??? In the NYC area for $1756 a month maybe a one bedroom apartment well out in eastern queens near the Nassau border or maybe in some parts of central NJ (but who would want to live in those places where it take 90 minutes on a good day to commute each way )
There were also changes in the lending guidelines. Self employed people can no longer get a conventional mortgage - that's 50% of the market place!
I can attest to the facts in this article. I'm 44, married, with a 5 year old boy. I have never been able to own my own home. I make $54,000/yr, we're a single income family, and are struggling to pay our $1300 rent for a 2/2 condo in California.
Owning a home in a nice area is a pipe dream for me. I can never save enough $$ for a downpayment, and a mortgage in my area would be through the roof, even on a 30 year.
The one thing I'm grateful for: I didn't go to college and have no student loan debt. :-)
I hear you. I'm about the same age, married, with a negative 3 month old coming out soon. Doing ok now, but even with an Engineering job, tons of experience, institutional knowledge (>20 years same place), stellar performance reviews, the cost cutting efforts are gunning for me. Wife wanted her dream mcmansion, but i may have convinced her to stay (at least for 3 more years) where we are in a very affordable townhome I have owned for a long time (small mtg/$400 p&i). I think she gets it when she sees the cost cutting coming that may impact my job very soon. We both went to (in-state) college, part-time, at nights while working full-time, to take advantage of tutition reimbursement.
Good luck to you and your family. the bottom 99.5% are all in the same boat, just some will go under later than others.
I will never buy a house ever again. Renting now - after relocation. But -- when the kids are grown (few more years) and can hopefully get jobs (maybe...) -- I'm going "gypsy" since I can work from anywhere.
RV, baby. Not a new, fancy one with all of the bells and whistles - nope, just something safe I can gut and make my own.
the socialists want high divorce rates with adult children living with their parents. married at 45, children at 55, divorced at 60 and the state gets to indoctrinate the kiddys into the satanic arts as "state property", to be brainwashed and vaccinated at will, by the will of the state.
sieg hail obola!!!