Homeownership is a part of the American Dream. If one works hard, they can achieve more than the previous generation and improve their quality of life. However, according to Pew Research Center, homeownership in the United States is becoming more exclusive.
The study that analyzed the Census Bureau housing data highlighted that renters are currently at an all-time high. The previous record was set in 1965 where almost 37% of household were renting. This year, the number is almost the same at 36.6%. According to the US Department of Housing and Urban Development, 47% of households in Miami are dominated by renters. The popular choice of neighborhoods include Brickell, South Beach and Downtown.
Ever since the collapse of the housing market back in 2007, the United States households has increased by 7.6 million. 6 out of 10 households are under 35 and they are currently the largest age group who are renting. However, the biggest jump belongs to those who are between the age of 35 to 44. The number of renters in this age group increased by 10% post-recession.
This evolution is also noted in those within the age group 45 to 64 where there is an increase of 6% of people renting. The only age group that did not increase is those who are 65 and older. They remained at 20% flat.
According to a separate Pew report, 72% of the renters expresses their wish to buy a house at some point. The majority of renters explain that they are renting as a result of circumstances (ex: financial reasons) and only 32% said it was a matter of choice.
Furthermore, acquiring a mortgage is currently a challenge especially when house inventories are low and the prices are high. Mortgage standards are tougher and borrowers need more than just a stated income. The traditional low doc and even no doc are almost gone. Granted, banks and lenders have more flexibility than they did after the housing crisis and mortgages remains affordable and cheap. Qualified buyers on the other hand are forgoing homeownership in fear of possible economy crisis.
In conclusion, there is still a strong lingering dream of owning a house for Americans. However, it may seem less attainable than the previous generations.