Homeownership rate hits a 10yr low.....Today The Census Bureau released its survey of residential vacancies and homeownership for the fourth quarter of 2010. Every quarter the census bureau releases it's backward looking report to give us some information on homeownership in the country and how it compares to a year over year number. The report covers data by region, age, race, and income levels.
The report covered the following:
The total of all housing units for the 4th Quarter of 2010 was 130.85 million, up slightly from the same time period of 2009
The number of owner occupied units: This total number came in at 74.8 million
The number renter occupied units: This was 28.8% of the total of the total housing units
The number of vacant homes: This is 18.39 million (we need help on this one)
Homeownership is down which means rent inflation could be on the way up.Reason being; so many more people are renting so you have less and less rental properties and landlords know this and therefore can boost up the rents a bit. This may lead to an increase in sales in multi-family inventory, at least we can hope so. This maybe the only positive in the report. Tighter lending policies means it's harder to qualify for loans so and many have turned to renting as a necessary alternative. I'm afraid that this could start to create a larger problem. If you have looked closely at your supermarket bill lately you will notice that food prices are are on the way up. This is a world wide phenomenon and part of the reason we have had the civil unrest in many countries as of late. Now I'm not saying we are the next Egypt but take a step back and look at things for a minute.
Gas prices are on the way up
Food prices are on the way up
Unemployment is still above 9%
I hope like the rest of us that the strength of the American Spirit will allow us to generate the industry to pull ourselves out of the mess we have created. The very real fear is not these daily economic reports or data points, its the reality that world is changing around us. We as Americans think we are safe in our little bubble, but what happens when counties like Spain have 20% unemployment, wheat prices are up 28% over last year, and corn prices are up 37% over last year. Not to mention oil prices are now over 90$ a barrel.
This in large part can all be traced back to our country and our housing crisis. We exploded with housing growth and banks created investment vehicles with credit default swaps and other exotic investment vehicles that were bundled and sold around the world as an unknowing house of cards. It worked like this, Joe borrowers $50 from me and I'm worried he might go broke and not pay me so I go to Julie and ask her to insure that debt and she does for $5. Well that $50 debt was the housing market and when the values went down that debt had no collateral and Julie or AIG could not insure the debt.
We then come in and pump the banks full of hundreds of billions to save our tails. The problem is that this has led to inflation around the world, not the same inflation that we are used to seeing but a scarier inflation in the shadows. Our quantitative response to the housing crisis can be argued to the point that it's causing these food inflation's. We know the credit crisis caused "The Great Recession", high unemployment, and full circle to the start of this article higher rental numbers.
On the surface the Homeownership Report can be read as a simple census quarterly report. Analysts and housing experts will have their say to the relevance of the numbers to the housing market. They will say it's good or it's bad. But if we step back and look at in terms of a global report. A report that has families struggling to find the landlord willing to rent to them after their credit was destroyed by the side of effects of a banking crisis. A report that shows rental inflation, as a side effect of Wall Street's greed. As a report that could work against all of us with higher food prices, it leads me to my hope that we look for answers. The answers to all these problems is not more money for this program or that program. The answer has to be in the way we think as human beings. We need to change the we think as human beings. This was a HOME CRISIS, not a HOUSING CRISIS.