The Homeownership Outlook is Bleak—Or is It

first_img Freddie Mac Homeownership Rate 2016-10-12 ScottMorgan1 October 12, 2016 742 Views in Daily Dose, Data, Headlines, News The national homeownership rate has been dropping for more than a decade, and the future is not looking much brighter for some housing insiders. The U.S. Census puts the national homeownership rate at about 63 percent, half a percent lower than it was last year and the lowest point since the Census Bureau began tracking the data in 1965. And according to Harvard’s Joint Center on Housing Studies and Urban Institute, homeownership rates below 60 percent are not out of the question.But Freddie Mac’s October Insight report posits that such projections are overly grim and “ignore potential macroeconomic influences that might arise that are likely to have a significant impact on the homeownership rate.”First, Freddie Mac reported, the future of housing finance has yet to be sorted out. The GSEs are in their eighth year of conservatorship, which is “a tenure that was not foreseen by anyone when they entered conservatorship in September 2008.” Second, Millennials are at the age at which people tend to marry, start families, and buy homes, and they may do it at a faster pace than previous generations. Third, “the factors accounting for the lower homeownership rates of non-white demographic groups may be overcome,” Freddie Mac reported.Sean Becketti, chief economist at Freddie Mac, put the uncertainty of crystal-ball projections this way: “Twenty years in the future, today’s Millennial 35-year-olds will not act exactly like today’s Baby Boomer 55-year-olds. Or perhaps they will. And this is where experts from the Joint Center on Housing Studies and the Urban Institute begin to part ways in their projections of the homeownership rate.”Applying “some fancy arithmetic to current conditions,” Becketti said, does not incorporate future macroeconomic disruptions, significant policy changes, or shifts in social attitudes in their calculations.”In either case, we believe their projections may be overly pessimistic,” he said. “The income and education gaps that are responsible for some of the differences may be narrowed or eliminated as the U.S. becomes a ‘majority minority’ country. And as these types of potential home buyers comprise a larger and larger share of the population, it will become increasingly expensive to overlook them.”Profit-oriented financial institutions, he said, will be motivated to find better ways to serve these populations.center_img The Homeownership Outlook is Bleak—Or is It? Sharelast_img

Leave a Reply

Your email address will not be published.Required fields are marked *