Home Ownership on the Decline - 7/3/15
According to Yale economics professor Robert J. Shiller, perhaps best known for co-creating the Case-Shiller housing index, the housing market’s collapse several years ago was the worst since eighteen ninety. For a variety of reasons, including lending standards and diminished focus on homeownership, the nation’s homeownership rate has been in decline for eight years. It is now below sixty four percent from a peak exceeding sixty nine percent in two thousand and four.
With homeownership down, the rental market has been booming. As reported in the New York Times, on average the number of new rental households in the U.S. has increased by seven hundred and seventy thousand annually since two thousand and four. That makes the two thousand and four to two thousand and fourteen period the strongest ten year stretch of rental growth since the late 1980's.
Homeownership may remain suppressed going forward. The majority of new households expected to be formed will consist of people of minority background. Historically, these groups have lower incomes, fewer assets, and have therefore been less able to purchase homes according to the Urban Institute.