Undermining Home Ownership Imperative

Although modest rebounds or moderation in the pace of decline in some housing statistics (e.g., three straight gains in monthly housing starts, existing home sales up for two months in a row, pending home sales rising for four consecutive months) has fooled convinced some observers that we've hit bottom in the housing market, plenty of other data suggests such optimism is misguided, to put it mildly.

Aside from the fact that inventories remain bloated and house prices relative to incomes and rents are still above historical norms (even with the declines we've seen already), harsh economic realities are exerting relentless downward pressure on the demand side of the equation, shrinking the pool of potential buyers and undermining the imperative that drove qualified, marginal, and unqualified prospects to make major sacrifices in their lives so they could become card-carrying members of "the ownership society."

Below are three recent reports that suggest to me, at least, that the last thing many Americans are going to be thinking about in the immediate years ahead is the notion of taking on a mortgage and all the other obligations (e.g., taxes) and risks associated with owning a home (hat tip to reader J.C. for the first two articles):

1. "Fewer New Households Formed in Recession" (Washington Post)

Unemployment Likely to Make The Trend Worse

The number of people setting up their own households has fallen to some of the lowest levels in a generation, a trend that threatens to prolong the recession.

Many people, young and old, who in more promising times would be out on their own, are finding themselves like Alan Ridenour -- stuck at square one.

A few months ago, the 22-year-old Texan had imagined himself going from government-agency intern to financial analyst, moving out of his college dorm room and into a place of his own.

That was more than 50 job applications ago. He is still an intern. And instead of his own place, his current address is the couch in his sister's place.

2. "Americans Swap Homes for Hotels as Recession Bites" (Reuters)

Some Americans are swapping homes for motels as the ranks of the homeless swell during the recession, crowding out shelters and forcing cities and states across the country to find new types of housing.

In Massachusetts, a record number of families are being put up in motels due to high unemployment and the rising number of homes going into foreclosure, costing taxpayers $2 million per month but providing a lifeline for desperate families.

"I feel like this has saved my life," said Tarya Seagraves-Quee, a 37-year-old former nurse.

3. "Homeless Families Spike in the Suburbs" (CNNMoney.com)

The Department of Housing and Urban Development says the demand for shelter in rural and suburban areas jumped in 2008. HUD grants $1.2 billion to 400 communities.

Homeless families in suburban and rural areas jumped by 56% in 2008, according to a government report released Thursday.

Plus, the number of homeless individuals in suburban and rural areas spiked by nearly 34%, according to the U.S. Department of Housing and Urban Development's "2008 Annual Homeless Assessment Report to Congress."

Comments

[Pottermus:]

Our government has favored "Big $" over the guy that goes to work every day, buys a home, raises a family, and spends the $ that allow "Big $" to exist.

Sometime it's hard to be proud to be an American. That is until I look at the sacrafices our military makes. Of course these "True Americans" have hell to deal with when they return.

May God have mercy on us all.

Jul 13 12:21 PM

[Jimmy K:]

agreed Mr Potter... Trillions for Wall Street and nothing for Main Street.

Jul 13 12:34 PM

[Davewmart:]

It is about time the Americans took a leaf out of the French playbook:
bonjourplanetearth.blo...
US workers are about the most beaten down and oppressed on the earth.
Make the bastards fear you!

Jul 13 01:41 PM