Is owning a home a thought of years past?
Homeownership: Reports of Its Death are Exaggerated
There have been a growing number of reports announcing the death of American homeownership over the last two years. Some have said we are evolving into a rental society and even challenge the long standing belief that homeownership should be a part of the American Dream. They look at the falling rate of homeownership as proof of their point. Others say that the younger generations no longer see the value in owning over renting.
However, this past week, two news items might refute these points. First, DSNews reported the homeownership rate actually increased in the last quarter; the first quarterly increase in two years.
“After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report.”
Then, Fannie Mae released their 2011 3rd Quarter National Housing Survey. We will cover this report in more detail on Wednesday. But we do want to mention a few findings the report highlighted. Both Generation Y (birth date mid-1970s to mid 1990s) and Generation X (birth date mid 1960s to mid 1970s) have stronger beliefs in the importance of homeownership than those of the general population.
Here are the numbers for the three major reasons to buy (as per the survey) with the percentage who believe in each reason:
1. It is a good place to raise children and provide them with a good education:
- Generation Y: 84%
- Generation X: 81%
- General Population: 80%
2. You have a physical structure where you and your family feel safe:
- Generation Y: 77%
- Generation X: 79%
- General Population: 76%
It allows you to have more space for your family:
- Generation Y: 76%
- Generation X: 77%
- General Population: 73%
Both generations also believe in homeownership as an investment. 70% of Generation Y and 66% of Generation X see homeownership as a safe investment while 64% of the general population believes so.
Bottom Line
This country’s belief in homeownership is anything but dead. The younger generations have the same if not a higher level of belief than earlier generations. As the economy improves, more people will make the move into a home of their own.