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Once the benchmark of personal success, the American dream of homeownership is waning as more would-be homeowners are choosing to rent, according to a report by Morgan Stanley.
U.S. homeownership has fallen below 60 percent, to 59.7 percent, not including 7.5 million delinquent mortgage borrowers. The lowest recorded rate was 62.9 percent in 1965, the first year the Census Bureau began reporting the figures.
Easy credit fueled the American dream to its all-time high of 69 percent in 2004, as home prices neared their peak. But today's buyers are spooked by tighter lending standards and the specter of foreclosures and mortgage delinquencies. The Morgan Stanley report suggests that these factors are forcing the country away from being an ownership society into one made up of renters.
The U.S. real estate market has always been cyclical, and in times like these it helps to remind ourselves that "this too shall pass." If the lessons learned from this latest housing crisis result in more responsible lending and borrowing, it will only help stabilize the industry for the longer term. And not everyone was going for the easy credit solution: The latest Census data from 2009 reports that nearly a third of the 76 million homeowners had no debt or mortgage on their home.
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I have yet to hear about the consequences of someone walking away from their mortgage resposibilities. In another BLOG we are told that people walk away from their homes in the Chicago area, and that BOA is going to give these homes to the city of Chicago free of charge.
What happens to the borrower who left the mortgage become forclosed??
Another thing.....GM paid back its bailout, but have the Banks done so??