We’re creating a generation of American renters rather than home owners, reversing the trend since World War II.
Yes, home sales and prices have been rising, which in turn has created lot of construction jobs, and made some home-owners feel a bit wealthier. All good for the economy, at least for now. But the reason the housing market has turned around isn’t because banks are issuing lots of new mortgages. Lending standards are still tight, and banks are reluctant to issue new loans – especially to younger people who’d otherwise be fueling the market for new homes. Unemployment remains high among millennials – more than 8 percent even for recent college graduates. And their student debts keep mounting, disqualifying them from home loans. As a result, the number of first-time home-buyers is still shrinking, and young buyers now make up their smallest share of the housing market in more than a decade.
The rise in home prices and construction is being fueled instead by big investors -- many of whom have no intention of living in the homes they buy or build. They’re getting a high return on investment by borrowing at rock-bottom rates and then turning the properties into rental units, which young individuals and families are moving into in record numbers. Last month, a Pew Research Center survey found that the share of millennials who own their homes has fallen from 40 percent to 34 percent since the start of the recession, with a similar decline in residential debt. Overall, the percent of Americans owning their homes continues to drop, while the percent renting is growing.
The housing market may be bouncing back, but not home ownership. And that’s a big change for a society once based on the ideal of owning your own place. To me, this is a disturbing trend -- paralleling the overall trend toward widening inequality. What do you think?
We’re creating a generation of American renters rather than home owners, reversing the trend since World War II.
Yes, home sales and prices have been rising, which in turn has created lot of construction jobs, and made some home-owners feel a bit wealthier. All good for the economy, at least for now. But the reason the housing market has turned around isn’t because banks are issuing lots of new mortgages. Lending standards are still tight, and banks are reluctant to issue new loans – especially to younger people who’d otherwise be fueling the market for new homes. Unemployment remains high among millennials – more than 8 percent even for recent college graduates. And their student debts keep mounting, disqualifying them from home loans. As a result, the number of first-time home-buyers is still shrinking, and young buyers now make up their smallest share of the housing market in more than a decade.
The rise in home prices and construction is being fueled instead by big investors -- many of whom have no intention of living in the homes they buy or build. They’re getting a high return on investment by borrowing at rock-bottom rates and then turning the properties into rental units, which young individuals and families are moving into in record numbers. Last month, a Pew Research Center survey found that the share of millennials who own their homes has fallen from 40 percent to 34 percent since the start of the recession, with a similar decline in residential debt. Overall, the percent of Americans owning their homes continues to drop, while the percent renting is growing.
The housing market may be bouncing back, but not home ownership. And that’s a big change for a society once based on the ideal of owning your own place. To me, this is a disturbing trend -- paralleling the overall trend toward widening inequality. What do you think?
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