The American Dream of homeownership is losing momentum. The U.S. Census Bureau reports that for the first time since 1995, homeownership has fallen below 65 percent. The rate is 64.8 percent. The peak, in fourth quarter 2005, was 69 percent.
Investors pulling back
As home prices rise, investors are seeking returns elsewhere. But higher prices and tight credit standards are keeping a lot of potential homeowners out of the market.
The National Association of Realtors forecasts a weak selling year for 2014, with a little over 4.9 million home sales, compared with close to 5.1 million sales last year. Home prices, they predict, will rise between 6 and 7 percent this year.
Meanwhile, rents continue to rise, according to the Census Bureau. First quarter median rent was $766. Median asking prices on residences for sale was $139,200, declining from the peak of just over $200,000 in 2007.
Retirement wins over homeownership
Attitudes about homeownership among adults seem to be shifting. The results of a study by Harris Poll for the National Endowment for Financial Education show that half of American adults say their top financial goal is retirement. In 2011, 47 percent of respondents said that.
By contrast, the number of people citing homeownership as a financial goal is dropping. This year, 13 percent claimed it as their most important goal, compared with 17 percent in 2011.
"People are more in tune with the importance of saving for their retirement years," Ted Beck, president and CEO of the endowment, says in a news release. "Economic recovery is inching forward, yet many individuals and families still are experiencing difficulty getting back on track. Americans seem to be finding reassurance in more long-term financial-security-based values rather than material values."
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