A mortgage market that is practically 100% government-driven, impossibly low rates for impractically long periods of time, no MtM concerns to clear delinquent or foreclosed property from bank balance sheets, and sure enough 'prices' for the houses that are being sold have risen. But there's a rather worrisome unintended (we presume) consequence of this 'recovery'. As BofAML notes today, the US has shifted to renting at the dramatic expense of homeownership...
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From 2007 through 2012, there have been over 5 million new renters, which came at the expense of 1.2 million fewer homeowners.
This shift pushed the homeownership rate to 65%, the lowest since mid-1995. The increase in renting has been driven by two key factors: 1) foreclosures forced many homeowners to become renters, and 2) tight credit conditions with an uncertain outlook for home prices encouraged households to rent.
Chart: BofAML