Homebuyers are holding back, for sure, as home prices keep falling and lenders continue their reluctance to extend a mortgage to anyone without stellar credit and a 20-percent down payment. According to CNBC, experts expect home prices to drop further by the end of the year, possibly by 6 percent to 7 percent.
But there's a change in attitude, particularly among younger buyers, that may be stalling the housing market. The Wall Street Journal reported that the latest Census figures show a decline in homeownership not seen since the Great Depression. Battered by a housing crisis that doesn't seem to have an end in sight, more people are viewing the American dream of homeownership with a jaded eye. Far from being the solid investment in the future, reports of foreclosure, inability to refinance to more favorable terms and the financial fallout that brought to light the whole sordid banking mess have all made renting a home seem like the better, safer solution for many Americans.
The latest Census figures show that in the decade from 2000 and 2010, the homeownership rate fell by 1.1 percent to 65 percent. Every region in the country declined, with major cities like New York, (69 percent renters) Chicago (55 percent renters) and Los Angeles (61.8 percent renters), leading the way. The regions with the highest homeownership rates were Keweenaw County, Mich. (89.8 percent) and Sumter County, Fla. (89.7 percent). Among age groups, the 35-44-year-old group saw a drop of nearly 4 percent in homeownership, from 66.2 percent to 62.3 percent.
Homeownership rates are still the second-highest they've been since the Census survey began collecting data in 1890, but experts expect the housing slump to result in further declines.
If you were in a financial position to buy a home, would you consider renting instead?
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