Is the American Dream of home ownership alive and well? A recent census report suggests it’s not. 63.4% of Americans own homes, which is the lowest rate since 1967. The data show that people are now renting more than buying. We’re becoming a nation of renters.
Consider that more people ages 18-34 live at home with their parents than at the worst point in the Great Recession. And despite the record-low interest rates and governmental measures to boost home ownership, fewer people can afford to buy a house.
Economically, it seems renting is more of a necessity than a choice. Increased regulations and scrutiny, combined with a lack of capital, make it hard for people to afford homes at all.
Plus, lackluster income growth means people don’t have savings for a down payment, likely because they’re paying off student loan debt. Underemployment plays a role too. Consider too that many renters were homeowners, but foreclosures and damaged credit from a rough economic ride caused them to lose their homes.
Supply and demand are altering the housing market such that there are many more renters than before, making the cost of renting more expensive (demand outweighs supply). That could help push more people to owning homes, however, higher rent costs don’t solve the issues of under-capitalization, bad credit and the like.
Perhaps most revealing is a Gallup poll from earlier this indicating more people are giving up the dream of owning a home. Only 7% of respondents will buy a home this year, and only 36% in the next five years.
So what’s it all mean?
The American Dream could be dying right now, in plain view.