About Homeownership Trends

The housing crisis, ongoing foreclosures, and the slow painful recovery continue to dominate the news. Two clear trends and topic areas are rising to the top for the real estate industry. First, the recovery isn’t going to end soon. In fact, a majority of economists now predict that the recovery will slug it out for about another year to year and a half before gaining real steam. Combine this with rate resets and more and foreclosure pressure continues for as far as the eye can see. At the same time, home rentership continues to rise at a surprising rate. Clearly, the industry remains in tremendous change.Learn more about us at  great post to read

First, let’s discuss rentership. Since 2004 began the number of home renters has increased by 3.4 million. This is a giant shift. In fact this is an increase of 10%. At the same time, U.S. population increased only 2% to 3%. So, home rentership is increasing at approximately 3X to 4X the U.S. growth rate. Add to this, the fact that home purchase trends for all manner of contributing factors including credit qualifications, down payment requirements, consumer credit scores, consume wealth, expected ownership period before choosing to buy, and loan term requests have all moved in favor of rentership. The bottom line is that home rentership growth is growing right now and will accelerate as the economy improves and the unemployed are once again engaged in the economy.

Second, the wind of change are starting to show on Capitol Hill as well. In the past U.S. policy favor ownership aggressively. Now the Secretary at HUD, discussion in Congress, and public sentiment has moved from assumed home ownership to a posture that not all households should own a home. Certainly the numbers don’t support favoring this concept. Household appreciation averaged just 1% per year between 1975 and 2008.

This all is converging toward a major evolving rewrite of homeownership policy in the United States. We can expect some or all of the following:

-Policy will favor multifamily and rental ownership more than it has in the past. For multifamily, the change could be dramatically in favor of these projects.
-Policy will withdraw benefits of interest write-offs for 2nd homes and luxury housing. The burgeoning federal deficit recommends this and such a withdrawal will move homeownership heavily in favor or rental ownership by investors as a means to increase taxes and correct ownership / debt management issues.
-Expect down payments to increase still further as a means to reduce tax payer risk on home owner debt.
-Investor led purchases are going to gain significant strength as a means to increase responsible ownership. Those on the front end of this trend stand to make significant gains.