Image via Wikimedia Commons
It took long enough, but the economy is on an uptick, sloughing off the morass of market doldrums that lingered after the recession had passed, marked by appreciating home prices (which despite slowing growth, is actually expected to be at a moderate level next year) and decreasing unemployment (which by the end of October fell to 5.8 percent). The new mortgage rules have been passed, but the homeownership rate hasn’t increased in turn - instead, it seems like more and more Americans are renting.
In both the pre- and post-recession market, government agencies like the Federal Housing Finance Agency have been pushing for greater rates of homeownership, because this would arguably translate to greater community involvement and cohesion, and encourage the appreciation of local markets - after all, homeowners are concretely invested in their communities in a literal way. Undoubtedly, the recession exacerbated the trend, but putting aside the peaks and troughs of usual market activity, it’s arguable that homeownership was faltering since it hit its peak in the earlier half of 2004. But so far as anyone can tell, the current trend isn’t clearly a bad thing, but then again, there has been little solid explanation for it in the first place. One narrative, which while seemingly contradictory are compatible, is that millennials are either electing to move back home, or are otherwise striking out into the city. But either way, it’s an important demographic that may be underrepresented in the buyers side of the marketplace.
Still, it’s worth wondering to see how the market will change, if at all, in response to eased mortgage rules (characterized by aspects like down payments that come as low as 3 percent), which has some in the industry worried that it will foster an environment that mimics the subprime mortgage crisis that spurred on the recession.
