US increasingly shuns home ownership to rent

Its been close to a year ago but I saw Suze Orman the financial guru telling people that the American dream of home ownership is no more and that due to the way things are it will make better financial sense to rent. She explained that most people will not be able to afford home ownership. Actually I believe it was her show on the PBS television station. In my mind and from what I am able to discern from all that is going on I think there will be a lot more renters than buyers going forward. I am trying to see the reality of the situation and not just be a doomesdayer. Thanks for the posting.

I saw the show you are talking about and I think she said that for "most" the dream of home ownership is dead. I think it had more to do with the fact that unemployment was so high at the time of the taping and a lot of her audience probably lost their home or ruined their credit at a more advanced age so by the time these people would be "credit worthy" again, retirement would be their next stumbling block.
That being said, it creates a tremendous opportunity for us as investors now. So many of these people will need to find housing and will have to rent. Our ability to get the houses at a good price and rent them for cash flow creates a win-win situation that the general public probably hasn't thought of. Remember, many millionaires are created during bad economic times. We as investors can change the face of disparity by acting and being responsible caretakers of these unfortunate people. Show them that the glass is half full.

That's just my take on it.

Andy Sager
DG's AndyS

but if at the peak of the market the ownership was 69.2%, and now at the bottom of the market ownership is 65.9%... the difference is only 3.3% - not a whole lot... am I missing something?

I'm sure we will see the number decrease even more with all the default properties going into foreclosure soon...

Learning and progressing every day,
Valerie

I am in complete agreement with you that it is great for investors and I am having trouble getting my first deal, a house to rent for cash flow. I want to have 5 o6 houses to rent for cash flow as I am 63 and alone. This is how I plan to have money now that I am retired. It is the only thing that will save me. I have .68 in my checking acct and refuse to give up my house. Now this is info that I probably did not need to share and it does hurt. Yet I am exposing my vulnerability.
We will still have home owners but I think there will be a lot more renters. It will take some time for things to bounce back and they will because its all cyclical. Our population is still growing and not slowing down and as young people leave school and look for work they will have families and need to live somewhere. If people don't get futher education or learn a trade then they will likely fall into the poverty level. Quite often I hear how we are loosing the middle class and soon will be the rich and the poor. I am no expert so who am I to talk. There is so much to consider and I can only take care of and handle so much. I appreciate the conversation as I was just sitting here working on a seven levels deep. I think it is always nice to hear what someone else thinks as it gives us something else to think about.
On the news tonight here in Sacramento they said we are #6 in the country in most affordable housing and cheaper to buy than to rent. Average home price 164,000. Interesting.

"Even in cases where it might make more financial sense — or it might actually be cheaper on a monthly basis to own a home rather to rent one, a lot of people are not making that purchase," said Oliver Chang, head of U.S. housing strategy at Morgan Stanley."

It's not because the dream is fading, it's because people have crappy credit. But that headline doesn't have near the snap of the population "shunning" home ownership. If it was cheaper to buy a house rather than to live in an apartment with parking problems, loud stereos, screaming kids and rent increases, which would you choose? Duh. In 2000, before the wackiness of fogging a mirror to get a loan, home ownership was at 66.2%, .3% lower today. All the people who couldn't afford a home to begin with have been shaken out of the market as it reverts to the mean. At it's peak, it was artificially high, it's just returning to normal. But that won't get you ratings. It's just a sign of the economic times. It's not that people don't want to buy a home, it's that they can't.

are based upon the broad stroke of what this will mean as an environment to conduct business. I think it is a fact that the housing crisis is still a crisis and is getting (or will be getting) worse over the next few quarters. That means more houses on the market (probably at lower prices), a declining pool of credit-worthy available buyers, higher days on market (DOM) for listed houses, continued higher unemployment, stable and cheap financing from banks (if you can qualify) and lowered consumer confidence in the quarters ahead.

The country is such a predicament that it won't be able to unwind from this posture until 2014 at the earliest. Demographics play greatly into this scenario and as baby boomers retire and no longer are productive in the traditional sense, things may bump along at a lower level until 2020 - 2024. After all, they have been the engine that has moved this country along for the last 60 years.

Because of this, a great economic reset is on its way. It will take political courage to get it completed and I'm not sure any member of Congress has the stomach for it. But until things change, malaise will be the order of the day.

However, it is correct that you can make money in this environment if you know what you are doing. Just being here doesn't guarantee success. History has shown that for every millionaire made from adversity, 999 other folks have been destroyed by the same conditions. Opportunities come to those that are truly prepared to act and have the staying power to repeat the process multiple times.

Remember, it is no good to buy a home at $100,000 that used to be $300,000 three years ago if that house is on its way to be a $50,000 house three years down the road.

How can I have the word Send PM under the word Online in my post, any one? I am very new to this thanks!

on those words and it will allow you to send a PM