I just read a news story from the Associated Press today about the amount of homes that are owned by their occupants and felt the need to comment briefly on some of the numbers they quoted from the Census Bureau.
According to the Census numbers, 66.9% of households in the U.S. own their homes. This number is lower than the record high of 69% back in 2004–the peak of the “housing boom” earlier in the decade. So on the surface, it looks like bad news.
However the story also noted that for several decades the homeownership rate was right around 64% in the country, and that in 1995 this number began to rise due to both the Clinton and Bush administration’s push for home -ownership nationwide.
Looking at things historically, it’s probably safe to say that the extra 5% of homes were owned by people who probably should not have been getting mortgages and didn’t have stable jobs, income, or credit. That’s part of the reason for the housing decline and economic slump we’re currently in today. So by slowly returning to a homeownership rate nearer to our historical 64%, we’re probably going to see more stability in the housing market long-term because, borrowers are better able to pay back their housing debt and avoid foreclosure.
This is ultimately good news for the housing market for first time homebuyers and investors alike. More people are renting now than a few years ago, so buying investment real estate is paying off big for investors. And if you do qualify for a mortgage in today’s lending climate, you’re probably a very solid buyer with good income, job history, and credit ratings. Plus you’re locking in at record low interest rates and you’re paying upwards to 30-40% less for the same house than people did 4 or 5 years ago.
Talk about your good news!!??!
