Realtors say homeownership rate is too low


With Americans seemingly abandoning their love of homeownership, Realtors are tackling the task of bringing Americans back into the fold.

The U.S. homeownership rate edged up slightly to 63.5 percent in the third quarter, just above the 51-year low of 62.9 percent in the second quarter.

“Those numbers represent a trend that’s pointing in the wrong direction,” Bill Brown, a California broker and president of the National Association of Realtors, said Friday in Orlando at the group’s annual conference.

Brown is pushing for looser lending restrictions, along with credit scoring models that favor renters. What’s more, he wants Realtors to let renters know that buying doesn’t require a 20 percent down payment. Some loans allow borrowers to buy with as little as 3 percent down.

Brown didn’t say what he considers a healthy level of homeownership, although he did say the boomtime record of nearly 70 percent wasn’t sustainable.

“You can’t use that as a benchmark,” he said.

The homeownership bubble was inflated by a spate of “liar loans” that required borrowers to provide no down payments and almost no documentation of their income.

One theory is that millennials aren’t interested in being tied down by homeownership, and therefore are fine with renting.

Another factor: Inequalities of wealth and income are intensifying, leaving fewer middle-class buyers who can afford a home after several years of steep appreciation. From 2000 to 2016, U.S. household wealth rose from $44 trillion to $85 trillion, but that increase hasn’t been shared equally, said NAR Chief Economist Lawrence Yun.

“Total wealth has doubled, but it’s a very concentrated wealth,” Yun said.

Just 10 percent of Americans have “meaningful” stock holdings, he said.

Geographic gaps are widening, too, Yun said. Seattle, San Francisco and Denver are creating high-paying jobs, but Pennsylvania’s Lehigh Valley isn’t.

In Rust Belt areas that have shed manufacturing jobs, Yun said, “The American dream is no longer the American reality.”

Palm Beach County faces its own challenges in boosting homeownership. Prices are higher than the national average, yet wages are a bit below national norms.

In recent years, first-time buyers have all but disappeared from the housing market. However, first-time buyers returned in September, a month when they made up 34 percent of buyers.

“This is just the beginning of the return of the first-time buyer,” said Jonathan Smoke, chief economist at Realtor.com. “We could see substantial growth in this segment of the market if the economy continues to grow and mortgage rates rise only gradually.”


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