Homeownership is No Longer the Key Driver of America’s Industrial Economy
One of the biggest issues of the 2008 financial crisis was the housing crisis with the sub-prime mortgages that caused thousands of families to lose their houses, via foreclosure. As a new report from the real estate website Trulia presents, the great reset in the housing market is from owning to renting. The report analyzes the growing trend on renting versus owning across the U.S., as well as the rise in rental housing prices and the growing housing burdens faced by renters between 2006 and 2014.
The report states that U.S. households’ rent increased from 36.1 percent in 2006 to 41.1 percent in 2014; while the share of households who own their homes declined over that same period of time. The “millennials” was the sector of the population where renting was most notable.
The percentage by group ages was as follows: renters by the ages of 18 and 34 jumped from 62.5 percent in 2006 to 71.6 percent in 2014; the increase was even bigger between the ages of 26 and 34, with 10.9 percent between 2006 to 2014; for the younger group the increase was 5.9.
As the report says: “Traditionally, young adults have become first-time homebuyers as they grow older and have [advanced] in their careers and incomes. This suggests that the fundamental shifts in the economy (job loss, low-income growth, diminishing affordability of homes) may have caused the increase in renting for those in the 18-34 year-old group”.
The percentage of renters’ increase on all the group ages; 35-54 increase from 33 to 40.7 percent and from 55 an older they increase from 24.4 to 27 percent.
As of 2014, 66.1 percent of Hispanics and 61 percent of African American were renters; compared to just 34.4 percent of whites, Hispanics was the racial group with the highest increase from 57.4 to 66.1 percent, for a 8.7 percent increase, while African Americans increased from 56 to 61 percent and whites from 29.5 to 34.4 percent for a 5 percent for both groups.
It will be very interesting to find out how these numbers, from the 50 largest metropolitan areas in the country compare with the Lehigh Valley. The report, Justice for All, Challenging Wealth Disparity in the Lehigh Valley, already established a big disparity on homeownership and home values across race and ethnicity. Is time to start thinking that the American Dream of Homeownership is changing to the new normal of renting.