BALTIMORE —The number of homeowners has reached its lowest level in 50 years, and experts said the recession is much to blame.
Homeownership is down to 63.4 percent, according to the U.S. Census.
"It may be down, but we're not that far out of a huge recession," said Georgiana Tyler, an associate broker at Coldwell Banker Residential Brokerage. "I think that that plays a lot with people wanting to have more security."
Many strive for security, especially those just starting out on their own. Kirby Fowler, president of the Downtown Partnership of Baltimore, said millennials are trending toward renting more than buying.
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3 comments:
I feel like house prices are at an unsustainable high in the shorter term. When interest rates inevitably go up, buying power goes down and home prices have to adjust to make sure the banks still make their money. Unless we see wages increase rapidly, there's not going to be any purchasing power from buyers. And the mortgage process is a giant PITA right now. You basically have to prove every bit of income for the past 2 years. Heaven forbid if you have random cash deposits.
That being said, rents are outrageous. I bought a much nicer home for a bit less than the cost renting. The benefit was really a hedge against the future increase of renting costs, with about a 6 year break even period (not factoring in rising rent - just straight today dollars). Hopefully by then things will have sorted themselves out and home prices start rising.
I think at a lot has to do with the student loan debt that people have now when they get out of school. Income that was once saved to put a down payment on a house and the house payment is now going to pay off the student loan. Some student loans cost more than a house payment.
That's true, 3:03. A $40,000 loan is about $400 per month for 10 years. That could be 20% down on a modest house in less than 5 years. Take on a roommate to share those costs, and within 10 years of graduation you could be ready to upgrade, possibly with a home and rental property to your name with some luck in property values and increased income.
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