U.S. Moves Toward Home ‘Rentership Society,’ Morgan Stanley Says

[marmar]

(Bloomberg) The U.S. homeownership rate has fallen below 60 percent when delinquent borrowers are excluded, a sign of the country’s move toward a “rentership society,” Morgan Stanley said in a report today.

The national rate, which stood at 66.4 percent at March 31, would be 59.7 percent without an estimated 7.5 million delinquent homeowners who may be forced into renting, according to Morgan Stanley analysts led by Oliver Chang. The lowest U.S. homeownership rate on record was 62.9 percent in 1965, the first year the Census Bureau began reporting the data.

The homeownership rate reached an all-time high of 69.2 percent in 2004 as relaxed lending standards fueled home sales and President George W. Bush promoted an “ownership society.” Mortgage delinquencies, foreclosures and tighter credit for housing loans are reducing property buying, Chang said.

“Taken together they are forcibly moving the country away from being an ownership society,” Chang, based in San Francisco, said in an e-mail. “This change is only beginning, and is moving the country towards becoming a rentership society.” ..........(more)

The complete piece is at: http://www.bloomberg.com/news/2011-07-20/u-s-moves-to-rentership-society-as-owning-tumbles-morgan-stanley-says.html

[Raven]

1. Getting rid of the mortgage and property tax deductions will speed

that process along.

[indurancevile]

2. Funny. I remember Bush bragging about how high the percent of home ownership was during his regime.

How quickly things change, eh? Now the "banking community" has decided we're going to be a rentier economy. Oops, I mean renter economy.

I guess that's why they want to get rid of the mortgage deduction.

Yes. they are forcibly moving us to a rentier economy.

[Uben]

5. They bragged about the number of people who owned homes....

....as I remember it, not the percentage. I remember them saying the number of people who own homes is greater than it's ever been, which of course, increases every year due to the number of new home buyers every year. There can be more people owning homes without the percentage going up. They said it every year, like it was an accomplishment, when it reality, the number (not percentage) has increased every year since records have been kept. Every president could claim the same thing.

[indurancevile]

18. From his presidential website archives:

Expanding Homeownership.

The President believes that homeownership is the cornerstone of America's vibrant communities and benefits individual families by building stability and long-term financial security...

Under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2 percent. Minority homeownership set a new record of 51 percent in the second quarter, up 0.2 percentage point from the first quarter and up 2.1 percentage points from a year ago.

http://georgewbush-whitehouse.archives.gov/news/releases/2004/08/20040809-9.html

[originalpckelly]

3. No, let's call it what it is: Serfdom.

Right now, I think we are the second lowest form of serfdom, next to the lowest form: slavery.

Honestly, go read about serfdom, and then find out how fucked we are. These people want a return to the old times, and they're getting it.

[Vinca]

4. We're going to have the owners of the house and the people who live there paying him.

A two tier society on every street.

[exboyfil]

6. Home ownership rates for more liberal democracies

Germany - 42%
Switzerland - 31%
Denmark - 51%
Netherlands - 53%
France - 55%

Australia, UK, Canada, and US all around 65-70%
Spain is at 80%, Greece and Italy are even higher (think extended families living together)

These numbers are from 2006. I would not expect them to be more than a few percentage points difference.

My impression is that American housing and apartment median square footage is a lot greater than in other countries. An article from NPR in 2006 says 2,349 ft^2, but I have a tough time believing that given the size of the existing stock of homes. Our own square footage is 1,456 ft^2, and I feel fortunate to have that even.

Another statistic (this is home starts from 2003):

US: 2,300sf
Australia: 2,217sf
Denmark: 1,475sf
France: 1,216sf
Spain: 1,044sf
Ireland: 947sf
UK: 818sf

[marmar]

8. I'm surprised that it's that high in France......

...... but I suppose that once you leave Paris, it's a far different scenario. ...... But then again, why would you ever want to leave Paris?

[IndyPragmatist]

13. Thank you, it seems everyone has bought into the bull....

that you MUST own a home. My best friend bought a home 2 years ago for about $150k, and it is worth $100k today. His home will likely be the worst investment he ever has as there is no way the value goes back to $150k.

As a renter, I feel like I have much more freedom. I did my research and found an apartment that is managed well. Every problem I have is fixed immediately, and I am not chained down by a huge mortgage. If I find a job in another city, I can take it and not worry about whether or not I can sell my home.

Renting allows lower income individuals the opportunity to live in higher quality homes without the risk of them being unable to pay their mortgage. I guess everyone just bought into the farce that you must strive to own a home to be happy.

[exboyfil]

14. My family rented when I was growing up

I never really learned to be a handyman. I have owned 4 homes over the past 23 years, and I admit that I did not do the maintenance which I should on them. I tried at first, but I usually ended up with a bigger problem than what I had before.

What home ownership does do for you is to allow you to place yourself near your desired school (which we did), allow us to have dogs, and allow us to have a fenced yard for security for the children and dogs. All in all ownership is a good thing during that time in life.

If I can get my wife to agree, I plan to sell my house when my youngest leaves for medical school (or at least finishes college but medical school is her ambition) and assuming our dogs have passed away by then (it is nine years off).

A home is the biggest anchor you will ever have. I took a job in Tennessee about fifteen years ago. I bought a house which was some stretch for me. My employer did a reduction in force within months of my move. I was scared to death. I survived the RIF, and my employer later paid to move me to my current location which I do not plan to leave until my kids finish High School (and probably college since we have an excellent local university).

[originalpckelly]

15. You never own a home in this country.

Tell that to the little old lady who lives in a paid off house, but can't afford to buy food, medicine and pay property taxes.

If you have a mortgage, you don't own a home. You think you own a home, but you're renting with a few more privileges.
And if they don't get it from you that way, then you'll take out a HELOC, so they can get you for what little equity you had in the house.

Or a reverse (aka perverse) mortgage, where they buy the home out from under grandma, so she can't have anything to pass on to the kiddies.
Oh and most people don't own their cars outright. They rent or use a loan, which is renting with a few more privileges.
And now a lot of people don't even own the shit in their houses.

And we all make just barely enough to get by each month.

Poor is when you have to take out payday loans and use pawn shops just to get by. Those are the biggest scams going, yet they target the poorest of the poor.

And of course, that's if you're lucky enough to have a home at all.

[Sarah Ibarruri]

7. What no one is talking about, is that there are no jobs, so without money, how can Americans buy? nt

[Bragi]

9. Ending mortgage deduction would be a GOOD thing

Truth is, if mortgage deductibility wasn't already in the tax code, it would the tea baggers who would be demanding it, not progressives.

The reason is that mortgage interest tax deductibility is a regressive tax policy -- it benefits rich people more than poor.

It also encourages home ownership as a social good. In fact, however, what people need is stable, affordable housing. It matters little whether they own or rent it, what matters is that good housing is available and affordable.

Finally, mortgage tax deductibility encourages people to enter into new higher mortgages instead of paying them down.

Having said all that, I recognize that mortgage tax deductibility currently exists. What is needed is a gradual and progressive way to eliminate this tax policy that protects low and middle income mortgage.

Progressives should not, in my view, be defending this regressive and dysfunctional tax policy.

[exboyfil]

12. I agree totally

It is funny how whose ox gets gored influences these decisions. I was at a budget workship that my Congressman was putting on. I had a sincere young Communications professor in my group. He was obviously more liberal than myself, and I said yes go ahead and get rid of it. He had just bought a house, and he was not in favor of doing away with it. I suspect he bought a little more house than he should have.

[HughBeaumont]

10. Putting money in the hands of the rich . . .

. . . while taking it out of the poor/middle/working classes tends to lead to just such a dilemma.

Business Without Business: the Republican fantasy that will never come to pass no matter HOW hard they try.

[dixiegrrrrl]

11. We are "buying" but I consider it renting from the bank.

Until I get the ( probably counterfeit robo-signed) mortgage pay off paper in my hands, I figure we are renting.
And given the state of the economy, I also figure we may not ever pay off the mortgage.
But hell, the "rent" is very cheap, ( low low monthly payment) so we are better off than a lot of folks who would pay almost twice as much to rent a comparable house.

[mmonk]

16. Whatever the corporate state dictates.

Their deregulation wrecked the means by which I make my living anyway.

[in_cog_ni_to]

17. Being a homeowner is HIGHLY, HIGHLY OVERRATED.

I guess back in the 50's, 60's, and 70's, being a homeowner was smart. My first house cost $20,000 in the 1974. HELLO? You can't even add a room addition for $20,000. It was inexpensive to put a new roof on a house. It didn't cost a fortune to buy new appliances. It wasn't outrageously expensive to have things repaired. Property taxes weren't what they are now. It is too expensive to be a homeowner today.

2 years ago it cost us $10,000 to put a roof on our home. That $10,000 was the cheapest estimate too. Most were in the $13,000-$16,000 range. In 25 years, when a new roof will be needed, it will cost $25,000, if not more. Who the fuck can afford that? Seriously. Why would you WANT to pay that? Property taxes are ridiculous. I try to do most repairs around here, but there are some things I just can't do and quite frankly, am getting tired of doing. I've painted every room in this house 3 times, by myself and I am DONE. Labor costs/materials are outrageous.

We own our home. It's paid for and we are getting rid of it (we hope we'll be able to get rid of it in 4 years) and leaving this hell hole of a country and are planning to rent for the rest of our lives. The greedy assholes can have this country. What are they going to do if all the citizens leave and take their tax dollars with them? What exactly is their GRAND PLAN for this country? I guess then they'll start selling off each State one by one until it's no longer the "United States."