The rate of home ownership in this country is now 64.2%, below the all time high of 69.2% in 2004. Why the disparity? Renters and those living with family say they simply can’t afford to own a home.
The National Association of Realtors (NAR) found in its latest Quarterly 2017 Aspiring Home Buyers Profile that 75% of the these 35.8% non-homeowners, these renters and people living with family, want to own a home. Why? Because these people want to live the American Dream and homeownership continues to be central to living the American Dream.
Lawrence Yun, chief economist with NAR, substantiates the realities of those 11,000 survey respondents (an unusually large survey sample). “A tug-of-war continues to dim optimism (about the possibility of home ownership) in many markets throughout the country. Solid job creation is fueling demand for housing…(but) extremely frustrating conditions continue to be most apparent at the lower end of the market which is where the overall share of first-time buyers enter the market. Given the strength of the job market and of the economy, there (ought to be) more housing opportunities available for first-time buyers.”
We learn from this study that shifts in lifestyle and finances are the deciding factors in buying a home…
- 24-32% of those getting married and/or starting a family and/or retiring want to buy a home.
- 26 – 30% of those experiencing improved finances want to buy a home.
- Those wanting to “settle down in one place” (12 – 16%) want to buy a home.
Yun believes that housing demand in 2018 will be fueled as Millennials “…finally decide to marry and have kids. Solid job growth and a strengthening economy will push incomes higher.”
Yun also believes, however, “…with prices and mortgage rates expected to increase, affordability pressures will persist. That is why it’s critical for much of the country to start seeing significant hikes in new and existing housing supplies. Otherwise, many would-be first-time buyers will be forced to continue to rent and not reach their dream of homeownership.”