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U.S. is back to renting
A "For Rent" sign taped to a window
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Kai Ryssdal: The Census Bureau told us not too long ago that home ownership in this country has fallen to the lowest level in more than a decade. Not to cast aspersions on the good people at the census, but a better timeframe might be four decades. If you count all those people who aren't paying their mortgages right now, home ownership is as low as it's been since 1965.
That's the analysis from Morgan Stanley. And the way the U.S. housing market is right now, the question that follows is: Is that such bad thing?
Marketplace's Amy Scott reports.
Amy Scott: The official home ownership rate is about 66 percent. Minus those delinquencies, you get 59.7 percent. Morgan Stanley's Oliver Chang says foreclosures take so long these days, they're slow to show up in the numbers.
Oliver Chang: So we believe that the seven-and-a-half million people that are delinquent probably should not be counted as homeowners because in a more normal environment, they would already no longer be a homeowner.
No matter how you measure it, home ownership has fallen from its official peak: 69 percent in 2004. Chang says as a result, the U.S. is becoming a society of renters.
Chris Thronberg: The big question here is: Why do we care so much? What is wrong with renting?
That's analyst Christopher Thornberg with Beacon Economics. Advocates of the tarnished American Dream say ownership creates more stable communities and essentially forces families to save money. But Thornberg -- a homeowner -- says buying a house is sort of like buying a flatscreen TV. It's a luxury, not a necessity.
In New York, I'm Amy Scott for Marketplace.
But cast aspersions you have dear Marketplace, albeit not on the folks at the census - but rather on the good, hardworking people trying to
keep ownership of their homes by allowing Mr. Oliver Chang's somewhat glib statement to go unchallenged by, perhaps, acknowledging Morgan
Stanley's role in creating the subnormal environment he referred to. For the record, I rent and have never owned a home.
Owning something doesn't mean someone will take better care of it. For some people it's true, for other's it's not. I know some people who actively encourage entropy. Some people take good care of items they rent. They realize that they don't own them and know they're accountable to someone else for it. Some people don't take care of the things they own because they're not accountable to anyone on how well they take care of it.
That said, I don't want %1 of the people owning everything and the rest of us having to rent it from them.
What's wrong with renting is that rents are too high, and will only get higher. Unless you intend, and are successful at, staying employed in a high paying job until you die, if you don't start buying a house when you are young, you will be homeless in old age. Do not make the mistake of thinking that you will make the same amount when you are 80 as you do now. If you want to prove me wrong, just hire an 80 yr old to fill your job.
Oh PUHLEEZ!!! just because the rate of home ownership has dropped 10%, give or take a decimal or two, now we're "a nation of renters"?
Come on, well more than half of us own homes still, even by the direst of statistics (59.7%, if you eliminate those in the process of default). We are still, by a clear majority, a nation of home owners. The editor who decided to juice up these statistics should be ashamed of him or herself--we have enough really troubling economic news to digest every day. Why add fuel to the fire?
