According to the US Census Bureau, back in 2004 about 70 percent of people owned their homes. Today, that percentage has fallen to around 62.9 percent. This means that today, there are a significant number of people renting as opposed to owning their home. In fact, American home ownership is at its 50-year lowest rate. As a result, many are asking the question, “Is America becoming more of a renter nation?”
With an uncertain economy, and a slew of people who can’t afford or simply refuse to purchase a home after the mortgage crisis several years back, it’s quite evident that we’re living in the times where more and more people are opting to rent. While this may be wonderful news for investors, it’s not the greatest news for others in the nation dependent upon the sales of homes for a solid income.
The millennials leading the way
The millennials, who range from ages 18 to 34, are leading the way when it comes to renting homes. Many of them simply don’t want to be tied down with a mortgage, with some of them feeling as if owning a home is more of a liability. There is a growing segment that are not on board with the American Dream, as many of them would rather spend their money on experiences, rather than owning a piece of the home ownership pie. Others are having a tough time holding down a job or simply cannot save up enough for a down payment on a home.
Prices of homes increasing
Wells Fargo Securities senior economists’ states that one reason for the higher rent prices is because in some areas the prices of homes are increasing faster than people’s incomes. Furthermore, it’s tougher for some people to get the kind of home loan that they need due to lack of sufficient income or bad credit.
The merge of two economic powerhouses
There’s been a recent merge between two economic powerhouses, private equity Blackstone’s Invitation Homes Inc. and Starwood Waypoint Homes, which signifies that they believe that America is certainly becoming more of a renter nation. This means that the largest landlord of single-family homes in America will now be Invitation Homes, with over 82,000 homes under its management.
Some say that perhaps things would improve if more homes were built, but the construction industry seems to be having a tough time hiring the amount of workers they need. It seems that there just aren’t as many people interested in doing construction anymore – at least for the amount of pay being offered.
So, is America becoming more of a renter nation? Many argue that it most certainly is. Whether it continues this way depends on various factors in the economy and people in general.
What are your thoughts?