The Home Ownership Rate = Clickbait

Real Estate Agent with Keller Williams Realty Professionals OREA# 201211562


The Home Ownership Rate = Clickbait


Read the headlines and the home ownership rate is now the lowest since the 1957, or the lowest in 20 years, or the lowest since the late Jurassic period! There's been a regular parade of articles with some version of this headline. Sounds relevant to a Real Estate Broker who needs to stay current with market trends to best advise clients. So I read 'em...but mostly for entertainment.



Yes, the home ownership rate has dropped significantly from the 2005 high, but that was an artificial high. In October, 1999, the Glass-Steagall banking regulations (enacted in the 1930's in response to the depression) were effectively repealed, allowing a wave of financial mergers and "creative" loan products. This loose lending (interest only, NINJA) produced artificial affordability, pushing up both prices and unprecedented ownership rates. 


While we're on the low side of this 50-year chart, it's not outside the historical range, and we're starting to rise again. If builders increased construction of entry-level homes, the ownership rate would naturally increase in kind. No doubt, a slower-than-usual economic recovery, low inventory/supply, and restrictive credit have all contributed to the low ownership rate.   


I believe in real estate and for many, many people it makes good financial sense to buy a home. However, home ownership is not a fit for everyone. Some want the flexibility to move, don't want the upkeep and costs, or are just not ready financially. Nothing wrong with that. But for those that are ready and able, owning real estate can build wealth and enhance your matter what the current home ownership rate is. 



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John Van Hogen - Principal Broker - Licensed in Oregon

Keller Williams Realty Profes.   9755 SW Barnes Rd #560   Portland OR 97225

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