According to a Census Bureau report released earlier this week, homeownership rates have hit an 18-year low in the first quarter of 2013. 74,511,000 households own their own homes at this time, down 698,000 from the same period in 2012. Homeownership rates stand at a seasonally-adjusted 65 percent, the lowest since Q4 1995. Q2 2004 boasts the all-time peak for homeownership with 69.2 percent homeownership. Despite rosy pictures of a recovery being painted on all sides by eager media and many real estate agents and their associations (read: NAR), the Census report says that “homeownership may have lost its place in the ‘American Dream’ as a new generation of potential homebuyers may have become wary of homeownership as a result of the wave of foreclosures in the last several years.”
So how are home prices rising in the face of record-low homeownership? Thank the investors, who are buying up single-family homes in order to rent them out to buying-shy families unwilling or unable to qualify for a conventional mortgage. “[Investor] purchases, many made with cash, are helping to support the housing recovery and pushing up prices,” reported Bloomberg analysts Prashant Gopal and John Gittelsohn. Paul Diggle, Capital Economicsproperty economist, says that he believes homeownership rates will continue to fall throughout 2013, and recommends that investors “make hat while the sun shines.” Do you think that it is still the right time to be a landlord? On what scale?
Your comments and questions are welcomed below.
by Carole VanSickle