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American "Nightmare" Shocker: The Real US Homeownership Rate Has Never Been Lower
The transformation of the American Dream, most broadly manifested in popular folklore as the aspiration of the US middle-class to own a home (even if it means agreeing to a 30-year loan with one's friendly neighborhood TBTF bank), into the American Nightmare, in which an entire generation (the Millennials) is locked out of purchashing a home due to over $1 trillion in student loans hanging over every financial decision, an abysmal jobs market (for everyone but college educated "waiters and bartenders" whose hiring is on a tear), and banks' unwillingness to lend money to anyone that can fog a mirror, and forcing millions of Americans to rent instead of buy, has been duly documented here before.
As we showed most recently in October, the officlally reported US homeownership rate, after peaking during the first housing/credit bubble, has been plunging in a straight line and is now the lowest since 1994..
The offset: soaring, record high rents, because since few can afford the debt to purchase a still massively overpriced housing market, the only option is renting at which point the laws of supply ande demand kick in.
We have also shown in the past why the "American Dream" is now anything but. The answer in one word: Millennials.
* * *
All of the above is well-known.
What however not at all known, is that just like the unemployment rate's major methodological revision several decades ago, so too the homeownership calculation has been "adjusted" in recent years with the consequence of making it appear better than it is.
To normalize for this revision, Bank of America ran a simulation on the US Homeownership rate, in which it "derived a homeownership rate assuming household weights by age group as of 1994. In other words, we only allow for the change in the homeownership rates over time to matter, holding the household age weights constant. Under this methodology, the homeownership rate would have declined to 62.1% last year."
In other words, instead of the most recently announced 63.9% homeownership rate, which was already the lowest since either 1983 or 1994 depending on how one looks at it, when stripping away the adjustment "fudge" which added some 2.3% to the homeownership rate simply because US households have aged, the real homeownership rate is far worse than what everyone believes.
As Bank of America summarizes, "this suggests that the decline in the homeownership rate thus far has been even more dramatic than the published data suggest."
It does indeed, and as the chart below shows, when stripping away the now traditional assumption fudges which have flooded every single data set and made virtually all the New Paranormal data meangingless due to its reliance on pre-Lehman crash demographic and labor participation assumptions, the reality is that not only is the American Dream now completely over, but that the American Nightmare has never been worse, because as BofA just calculated, the real US homeownership rate has never been lower!
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"Who will buy boomers suburban homes?"
In my neighborhood several homes owned by boomers are housing boomers and their kids and their kids. Looks like it'll be an inheritance, not a sale. Cutting out mortgages can benefit several generations. Everything old is new again?
When my dad was fighting in the Pacific my mom and I lived with her mother who owned the house her father left her, and so did my uncle, aunt, their two sons. When my grandmother died, my aunt inherited the house and her family and boarders continued to live there until the 60s when they moved to California. It's the way things were done before so many people could "afford" mortgages and property taxes. It may become a trend again. Old saying from New England: use it up, make it do, wear it out or do without.
CHINESE...
The truth will out.
The UN's Army will not save your bogus economy.
Oh, the rest of the country is SOL.
Janet talks to her friends in San Francisco, where house prices and rents are through the moon, supply so inadequate to demand that is powered by stock option vesting schedules for young engineers. She must really believe inflation is breaking out, galloping actually. This little city of 800,000 is now the tail wagging the 300-million dog. Jobs are plentiful and city mandated health insurance for waitresses and valets to level the playing field a bit has not hurt the restaurant and retail trades. Did you say wine club?
But, you ask "how can the real economy be doing so great with copper and the Baltic Dry Index and other barometers collapsing." Well China has so skewed these markets that Janet has no reliable data. All she has are the anecdotes from her friends by the Bay.
https://www.youtube.com/watch?v=UCmUhYSr-e4
Raising rates now will help Florida and Arizona retirees, but Texas? good night. The Dallas and Kansas City Feds has been belly-aching for rate hikes for seven years because of demand in the gas fields and in the oil patch. I think she's going to give what they begged for, good and hard.
All my ex-bitchez took all my homes
Prenups and condoms. Always.
No marriage and pull out. Always.
They say that pulling out is hard to do
Now I know
I know that it's true
Well, the Federal Reserve played "just the tip" back in 1913...look where we are today.
same with income tax...
Strangely, condoms and the "pull out" method have about the same level of effectiveness for preventing pregnancy, when done correctly, but they won't tell you that in school.
Bukkake and what's-her-name again?
do they live in Texas?
"all"...didn't learn the first time huh? bummer
Steve LIESman: "This just doesn't make any sense, the fundamentals are strong."
Well fucktard banksters still want to dismiss their foreclosure case against me but I won't let them off the hook without them explaining to the judge about the forged note they submitted as "exhibit A". So just paying taxes and insurance. After this I go after them for damages.
I have time, I don't lose sleep over this, I have resources and I actually like fucking with the banks in my own minor way. Will rent this house out soon and jump in the RV to see the States before the fall.
Homeownership in States will be like Europe soon.
Sounds like the Lord has chosen you for great things..........................
Forged note? Are you saying you didn't sign a note at all? Are you saying you signed a note for a different amount? What are you saying?
Smart financial people make a lot of money with forged notes. They just make copies and change them a little and bundle them into REMICS and sell and trade them on Wall Street.
This way here they don't pay any taxes on their profits and when all is said and done it get's bought with QE money by cronies at Fannie/Freddie. Blame it all on the borrower who tricked them. Nobody ever figures this out, especially courts, except a few rare scapegoats like BAC/Countrywide's Mozilla.
Rinse/Repeat for the American Dream
That is the playbook, for sure.
Thank you for the question. The bank, orginal "lender", submitted a note with no indorsement on it as they, the bank, was representing that they "owned" the loan/note/mortgage. Simple enough. However, the servicer, Nationstar Mortgage, LLC, well known continuing criminal enterprise, had given me, per my QUALIFIED WRITTEN REQUEST a copy of the note WITH an indorsement, three months prior, to "prove" the note was sold to Freddie Mac. So the bank submitted the note with no indorsement. Indorements can be added but they can not be deleted. The copy of the note submitted into open court was NOT a copy of the note AS IT EXISTED AT THAT TIME. Ergo, forgery.
Snapping back from:
He fogged a mirror, give him a mortgage
He can sign the closing documents if the defibrillator is effective
etc.
to where underwriting is now is a long, long trip. The pricing is just an indicator of how broken things really are.
Delusional.
Equivalent rents and Student loans...... 0.01 % plan Well employment rate 5.5 percent due to waiters and food service... JUST BTFD so more stock buybacks,, ........ and I am the lunatic for Audit GSE paper on FED.... "Sweet Caroline" USA USA USA
JPMorgan Chase ushered the American nightmare into existence in 1994 at a hotel in Miami Florida. Blythe Masters must have known this would blow up somewhere along the line, but she did not care whatsoever because the scheme was funding her own largesse. When Americans finally wake up she will be offshore with her billions safely stashed.
NOTE: American exceptionalism is the American nightmare and the Canadian horror of horrors.
The horror, the horror! :)
"The whole World could have been Willy Stark."
"The whole World could have been Willy Stark."
_All the King's Men_ starring Broderick Crawford
long privaet equity slumlorders!
an indebted slave is a good slave. Who doesn't like a co-ed looking for some cash on the side
Can you fund your retirement with used iphones? Will they be worth more than Beanie Babies?
My millennial is on strike with his beer and computer games. It's a Mexican standoff about repairing the old modular home he lives in on our property. Their are tarps on the roof but he still rises at 3:00pm. At least he works though, spends his money on new games.Maybe when he turns forty we can convince him to get a career. Oh yeah, not many careers these days.
Home ownership, especially for families is better than renting, however:
First, you don't own your home until the mortgage is paid off.
Second, if your house is not appreciating in value it is declining
Third, the money you spent on the down payment, closing, etc. & spend to maintain your house is called an "opportunity cost". In a zero interest rate environment putting $20 grand on a down payment is definately better than a savings account so long as the value of your property does not dip below the level that allows the fine print of the mortgage to execute.
Fourth, even if the mortgage is paid-off, there's still things like taxes, water, sewer and electricity which may or may not be fully or partially included in a rent payment & should be factored into the cost benefit analysis. If you're lucky enough to have a landlord that completes repairs and the like, then sitting on that cash may not be such a bad thing even if real inflation is eroding it.
I live in an gated apartment complex whose rent has increased from $614.85 to $696.87 in a year, but this is due mostly with having gotten away with previous increases and a renewed profit motive by management.
If I deduct a homeowner's minimum water ($36 min), sewer ($36 min) & trash ($36 min) fees, what kind of house could I afford with 20% down and $590 a month & then throw in landscaping, taxes, renters versus homeowner insurance in a coastal location, repairs and even some electricity, is it really better for me to own in this (or the next 5 year) economy?
There have been some compelling arguments recently I've read concerning this. One of the things that have changed in favor of renting is the progressive loss of private property rights. Some people have lived through nightmares of having someone in their home getting arrested for drugs, then the cops come, search the house, and find some drugs in the house. "Sorry folks, you just forfeited that asset". Also, once you buy it, you are married to it. Want to leave it sit for more than a month while you go live in your summer cottage for awhile? Insurance companies will drop you like a rock. Can't get insurance on an empty home anymore. More and more stuff like that is making a home a burden rather than a dream goal for people. Your job moves, but your house stays. Bummer. Thank your elected officials for never stopping looking for ways to pick your pocket. As a homeowner, you are a rooted, sitting duck in the crosshairs of greedy, ever more corrupt people.
Article is a farce. As long as there is property tax, almost no one owns their property.
Funny thing, property. My sister owned some property, part of it was part of a spring that once fed the town with water. Then the law came along and said that this property must be "protected", and couldn't be developed, changed, or infringed on by any structures or any use in any way. Couldn't use the water from the spring either, which flowed at about 20 - 40 gal. per minute on average. So I said to Sis, why don't you just donate that acre or so of property to the town, and let them own it, since you can't develop it or use it for any purpose at all, other than to just have it sit there and produce oxygen for free for the general population? Answer: They don't want it. Reason: If the town takes possession, they won't be getting property tax paid to them for it. Bottom line, you have nothing, and never will have it. Owning anything is an illusion, you pay rent for everything, and any rights to anything are temporary and fragile at best.
Donate it to a church then.
I do not think anyone should be called a home owner unless they are free and clear of the banks.
How about home financier?
It is like being in debt or not, it seems quite easy to figure out.
Anyone who has a mortgage does not really own their home, they are just a milking cow for the banks until they go broke and are removed from the banks property.
"Loan Owner"
Do you prefer "Debt Slave" or "Indentured Debt Servant"?
But will your property ever be free and clear of the government. In most cases, NEVER - even with a paid off mortgage.
exactly. Don't pay your RE taxes and see who really owns it.
That is why it is called the American Dream.
You wake up and realize it was all a bunch of Fantasy.
....And after the mortgage is paid-off the "homeowner" must deal with the eternal joy of property taxes. Fall a year or two behind and the homeowner will find out real quick who actually "owns" the property.
The real beneficiaries of this are young middle-class men in the U.S. It prevents them from marrying and having children with young American women. Other than a young American man, who has been fully indoctrinated by gender doublespeak in the increasingly bizarre world of the U.S. university, who would want to marry a young U.S. woman - their little heads all filled with feminist propaganda, living in the delusions of the grandeur of their own feminity, trying their damndest to always look and feel "professional"- that term used to excuse arrogance and obnoxiousness if a woman is wearing a pantsuit and driven to "success" by self-help-book-induced penis envy- all-consumed by their petty little materialist pleasures and their narcissistic body worship?
Huzzzahhh for the young men of America.
And their skinny jeans
Skinny jeans and spandex are not a right.
Have all the mirrors in america been broken along with our market?
WHO is telling these tarts they look good?
Lets get to the real issues ZH!
the American dream is not over. too many miscontrue its true nature in this media cesspool of a world we live in. the American dream is the eternal ideal of individual liberty. I choose and shall choose forever and to my dying day to live according to the ethos of individual liberty
i shall choose this philosophy no matter what entity or government or organization tells me is legal, illegal, or whatever else sundry impositions they try to sully me with
it is neither here, nor there. because rights, freedom, and liberty do not come from other people, or governments, or entities.
read the Declaration of Independence and reclaim these truths for each of yourselves, individually. #libertariansolidarity #individualism
besides, i live a 100% debt free lifestyle so i don't owe anybody anything anyway
Dream on, as they say...
Precious, my precious, metals are going down. Going down down down down. Going down.
Might get back to reality and subsequently I'll buy again, say silver at $5.
Balloons go POP!
Metals go down because they are becoming scarcer. Don't you know the laws of supply and demand? When there's more of something, it's always more expensive, and when something becomes very hard to find that everybody wants, the price drops like a rock. Oh, wait...
I went to the local pawn shop yesterday. Asked if they buy and sell gold or silver coins. The manager said they buy them based on spot price but don't resell them. Should tell you something...
It tells you that manager is smarter than the average guy.
bu,,,but but..I thought ZH said PM's are rigged? ( like everything else and my mother)..."supply and demand?" wtf are you smoking? ~ sarc~ ( sort of)
This certainly applies to precious metals and US, Japanese and Euro debt -- the more they create, the more expensive it gets.
Well, I dunno. Does this count the 15,000,000 illegals or not?
A lot of this trend probably just reflects increased urbanization, with a percent or so leftover from the 2008 crash, foreclosures and property buyups by the big monkey. Er, money.
It appears an economic miracle of wealth redistribution that homeownership in the US is a great as it is.
Considering that the Millennial Generation, aged 18 to 34, is 43% non-white and is larger than the Boomer generation and that a large number of these Millennials arrived impoverished from a bountiful-resource country that in many respects remains an undeveloped and impoverished Third World nation to this day - Mexico - this article is a statistical lie by obfuscation.
The median age of Mexicans in the US is 25; the median ages of the U.S. population and all Hispanics are 37 and 27, respectively,” according to Pew.
How many people have owned homes when they were 25 years old?
As for the rapidly changing demographics in the United States where whites are providing for their own displacement: The number of babies born in America to non-whites now outnumbers those born to whites.
You are missing the buying opportunity for young men here JR. The takeaway from all of this... young U.S. men should sieze this opportunity to marry a young Mexican girl. Firstly, they haven't been all mixed up by feminism yet and actually conduct themselves like women. Secondly, no massive student-debt burden for these young ladies from all their gender-studies courses preparing them for a life in "human resources." Third, they do not need a $500,000 home in the suburbs and a massive mortgage to show up the Joneses and please their little petty aristocrat fantasies. Finally, and possibly most importantly, your children can be "minorities."
Bullshit. They are all second+ generation
Seems we could use a great clearing event.
In America you never really own your home, until the mortgage is paid off , and even then they can fuck you .
If you payoff your mortgage, they can still confiscate your home if you don't pay the taxes to payoff loans and bonds the local political thieves have allocated from your future income.
You NEVER own your home in the U.S.
Out of curiosity, maybe someone has researched this, because I don't have the time today, but is there a country where you do own your home and land once you've paid off the mortgage?
That depends on what constitutes "own" in your mind. Because there is nothing to stop predators-DBA-government from changing their fictional "laws" and then applying those changes retro-actively, you cannot "own" anything in the real sense of the term... not even your own body, your own time, your own mind, etc.
However, a few countries still lack property taxes. I forget most of them, but Fiji is one of them... and not a bad place to live if you find the really great spots (which are all on the outlying islands, which means the 330 smallest of the ~333 islands).
I guess if they wanted to fix it they could.
I guess if they wanted to fix it they could.
You refer to the bogus charts...
Right?
So how long before real estate corrects since there are very few millenial buyers and boomers will soon be dropping like flies?
LOL....when the central bankers are prevented from raping the 90%
Buy yourself a nice motorhome. Put solar panels on roof. Thats the closet thing you are ever going to be to total ownership of anything.
...unless you buy a home and actually pay off the loan. It's only THEN that you really OWN it.
Well, you still have to pay (depending on locations) thousands of dollars each year in taxes. So you don't really "own" it, you just lease it from the govt.
You may lose your home for any number of reasons but that doesn't mean you DIDN'T own it first. You can lose if to a law suit, too.
You really think you "own" it? Try not paying whatever property taxes your locals decide you need to ante up; you'll find who really owns what!
Does Fannie Mae still market itself as The American Dream Machine?
what nightmare....this is according to the communist/socialist plan....the government owns your house, controls your job...creadle to grave serfdom....unless you are related to a Washinton power broker or a major political contributor...like Buffet, Steyer, Wall Street...etc
#Winning #Agenda21
Maybe people are figuring out that houses are extremely expensive status symbols, not "investments," and that if your woman won't shut up about having her own doll house like all the bitches she calls friends, you need a woman with a better attitude and grip on reality, not a mortgage.
If you really do have tens of thousands of FRBs or euros to piss away on a down payment, better investments by far include (in no particular order):
1. International equities (heavily weighted towards BRICS---think twice about North American equities, avoid European stocks like the plague while the outcome of the Fourth Reich's pissing match with Russia is at all in doubt)
2. A second passport (which some countries will sell you for as little as USD4000)
3. A vasectomy
4. If necessary, a top-notch divorce lawyer. (Trust me, he'll make you back his fee several times over.)
Just borrow money and go long Tesla. You'll have the dosh for a house soon enough.
It is not about the affordability of housing.
Most places renting costs more than mortgage + Escrow.
The issue is lending is repressed, due to general economic conditions and due to new government regulations with BURDENSOME disclosure requirements to get a mortgage...
(If you've gotten a loan since 2008, you know what I mean...It is a BIG change in intrusiveness. *For Instance* had to explain holding $3K in cash for wife's childbirth incidentals - after hospital said they needed $3K in cash - despite full 'cadillac' insurance coverage...had to trace and document that money back to the date and billing where it was earned. Apparently everyone is a money launderer now.)
AND/OR
Previous lending has inflated housing prices such that people cannot buy in cash as they once did.
You're right in that a major issue is the lack of lending but it's because of the risk factor to the lending institutions. They avoid the risk of lending and instead deposit their funds with the Fed and garner a small percentage of interest without ANY risk.
It is the Fed's way of controlling all the recent increases in the money supply that otherwise would flow into the economy.
And yet funny how thousands of mainland Chinese can flood into SoCal and plop down millions in CASH from their suitcases buying up entire neighborhoods, no questions asked.
I wonder on a per capita basis how many Americans are able to put the full dollar amount down in cash, no borrowing, on a million-dollar plus priced home.
I'm really close to tears, how much injustice is there for the minority of productive people.
I did a consulting job for FannieMae in 2003. I asked one of their "leaders" to give me an example of a measurement they hold their employees to ie. "10% annual growth in XYZ". She told me "we don't like to use numbers like that around here. It scares people" In 2008 well........you know what happened.
So, are we looking at housing price deflate round 2 soon?
I am wondering, how high the rate of car drivers is, that own their cars? I guess less than one third - while leased and bought on debt are way beyond 66%.
RE
I'd say around 20%.
I love the language that society has us use when we do sign up for that new home/car.
"I "bought" a car." - um, no. You ain't own shit; the bank owns you and your wallet until you cry uncle or you somehow eventually pay the thing off.
I see this as a good thing on the macro level.
Micro: obviously with declining wages, jobs, higher taxes, more debt - bad trend.
BUT on the macro: less people are bending over for mortgage loans from the bank. They are rejecting more usury from the banking interests. Good. Fuck them.
What would you expect? The demographics have never been like so in this country either. How do you think you're going to afford a house without a decent education, while the people that can get educated are over their head in debt. It's too much.