People are no longer buying and owning homes like they once did. American homeownership took another sharp drop in 2017, according to the U.S. Census Bureau. It’s at the lowest point since 1965. Wow! There is a huge shift going on in the real estate market. We are turning into a nation of renters, but why? What are the reasons for this? What is the positive to the economic situation? Should we be buying homes instead of renting? Find out about the move to a ‘renter nation’ and if America has decided to pack up and ship out home ownership for good.
In 2004, there was a peak where about 70 percent of individuals owned their home. Now, barely 62.9 percent do. Experts say that one of the big challenges at the moment is the affordability of buying. The cost to be a homeowner is rising faster than incomes. People do not have the same access to credit. Regular home buyers cannot be “regular” anymore. To own a home in a ‘regular neighborhood’ you have to be in a top-class of income earners. Steep rents are not helping the situation either. The renters cannot get loans or save enough for a down payment. It’s just difficult to impossible to make the leap from renter to homeowner.
Access To Information
The current generation has greater access to information than previously. We know what has happened in previous economic crashes and it’s often fear that keeps individuals renting. There is a “perceived” or anticipated pain of loss that can make many avoid the benefits that home buying can bring based on the fears of what could be lost.
The Desire For Freedom
A survey showed that millennials are a “generation of movers.” Affordability is a driving factor, but jobs and lifestyle are also influencing choices. According to Forbes, 45 percent of employees do not believe that they will stay at a job for more than two years. Millennial graduates are extremely likely to have more than four jobs by the time they reach age thirty-two. The workforce of digital nomads is creating a group of people who enjoy freedom and adventure in their career and life. The idea of a mortgage crushes these dreams and instills the sense of “holding one back.”
Uncertain Economic State
You can be certain of this— life will always be uncertain. Especially in today’s economy, you don’t know what’s gonna happen. Uncertainty spans the globe— from political to financial. We can’t predict if the tech or stock market will crash. Job security is an entity of past days as technology replaces so much of what humans once did.
With changing habits, retail shopping is being replaced by the world of online buying. Many stores are closing and businesses are going bankrupt. There is simply so much change that people must be ready for anything. We have to be prepared to move on short notice, lose jobs and have “a backup plan,” and be fluid in our long-term plans. All of these variables make owning a home a scary idea for the younger generation.
The Liability Of Homeownership
Some people are coming to the conclusion that being a homeowner is more of a detriment than a dream. The current ‘American Dream’ is to be financially free to travel; not the white picket fence plus mortgage.
Owning a home does indeed have its benefits. Homeownership is still important. The renter nation is a benefit to landlords and investors such as myself. A renter nation allows for more investing opportunities, yielding to the option of creating a positive financial situation. More people are investing in real estate, but staying as a renter. If any of the points made relate to your situation, know that it is ok (and good) for you to reinvent your own dream and lifestyle. Take a minute, whatever your dream may be, and see how investing in real estate can help you. Investing in real estate is a way that you can enjoy freedom— both financially and lifestyle wise— a way of living that is very appealing.