Home Ownership Hits A Low

By Author: David Reinholtz
Total Articles: 48
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It might stand to reason that home ownership would take a hit during the recent housing crisis, coupled with the recession that continues to plague the country, and the world, but what may surprise some industry experts, as well as the host of politicians who are touting a recovery, is that home ownership has reached its lowest level since the close of the last century.

Of course, when you state it like that: the close of the last century, that sounds like a long, long time ago, but it was only ten years. But as anyone who has worked in this industry knows, ten years can be a lifetime when it comes to ebbs and flows. Hitting a low of home ownership can mean many things, but for starters, it means that fewer people own homes now than they did in 1999.

What happened to the tax credit for new home buyers?

The first question this statistic brings to mind is that last year, and up until April 30 of this year, the government had offered an innovative offer to first-time (as well as those previous homeowners who hadn't purchased a home within the past three year), and yet the number of homeowners is actually ...
... lower than it was eleven years ago? The program was designed to get more people into homes, to encourage them to buy to stimulate the market, and the economy.

Millions of people did take advantage of this incredible offer, of course, but there were also millions of people who continued to lose their homes during this time period due to foreclosure or short sales. It can be said, then, that the home-buyer tax credit at least kept the number of homeowners from dropping to critically low levels.

Reading deeper into the figures

If we take a deeper look at this somewhat surprising finding, we can find a host of reasons for this downturn, as well as an explanation as to why home prices have been slow to recover, or even to bottom out. In some markets, the average home prices continues to drop, despite all of the government's best efforts to stem the bleeding.

The past two to three years has affected almost everyone in the country, regardless of economic standing or geographic location. With all of the foreclosures, there was bound to be a drop in home ownership across the board. This news doesn't necessarily mean that the trend will continue, but it does highlight something else that has been discussed during the past two years and that is that far too many people who couldn't actually afford the homes they bought managed to get approved for a mortgage.

Moving forward, what to expect

Now, as we are all aware now, there is a price to be paid for gluttony and greed and that even as the influx of new home buyers and homeowners during the past ten, even fifteen years, was great for business, it was artificially pushing the value of homes up, which helped to force some people who would have normally been able to afford their homes into higher mortgages than they were comfortable with. Some of these families and individuals have managed to keep their homes, despite the rise in interest rates or points or the decrease in their equity, but many more have not managed to be successful in that respect.

As home prices begin to settle down, bottom out, and slowly start to rebound, it stands to reason that those who waited, who couldn't afford the home of their dreams before, but now can, will gradually step back into the market and pick up some of the many available homes. As this happens, this figure will go back up, as will the prices overall. Housing is an interesting breed: it moves in cycles and ever upward, but sometimes it has to balance itself and check back from time to time.

David