Salient to Investors:
The US home ownership rate is 65% versus the record high of 69.2 percent in 2004, and back where it was two decades ago.
Anthony Sanders at George Mason University said low down-payment loans coupled with exotic adjustable rate mortgages helped fuel the housing bubble, so do we want to do this again?
Stuart Gabriel at UCLA said the housing crisis was brought on in part by the belief that home ownership could drive the economy and give the middle class access to a relatively safe leveraged investment, combined with the housing industry’s thirst for profits.
The housing market is drained of low-cost listings by private-equity firms building an industry of single-family houses for rent.
The NAR said the median home price rose 13.5 percent in June from a year earlier as 1 in 3 properties were purchased with cash.
Sarah Rosen Wartell at the Urban Institute said buyers in their 20s and early 30s are often at a disadvantage because they have thin credit files and limited assets for down payments.
Isaac Boltansky at Compass Point Research & Trading said legislators are not debating how much home ownership is a good thing, whether we should be a home ownership society.
Christopher Mayer at Columbia Business School said owning a home that is fully paid off provides stability in retirement and if the US has a greater share of aging renters that could put a strain on taxpayers.
Robert Shiller at Yale said home ownership has been oversold, and our 65 percent home ownership rate may be high compared with Germany’s at 53 percent and Switzerland’s at 35 percent. Shiller said home ownership may inhibit economic growth by limiting the ability of families to move as freely for jobs and the government subsidies could be used for other purposes, and we have seen the consequences of encouraging people to put all their life savings in one investment. Shiller said public support for home ownership will be lower for years to come and expects this boom to be smaller than the last.
Read the full article at http://www.bloomberg.com/news/2013-07-30/american-dream-erased-as-homeownership-at-18-year-low.html
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