US Becoming a Nation of Renters
21 July 2011
According to a new report from Morgan Stanley, home ownership rates within the US have dropped below 60% when delinquent borrowers are taken out of the equation, and it feels this is a clear sign that the country is moving towards becoming a nation of renters.
By March 31, the national rate was 66.4%, but if all delinquent homeowners were taken out of this figure then it would drop to just 59.7%. Since the Census Bureau began keeping data, the lowest rate on record is 62.9% which was recorded when the bureau was set up in 1965. This percentage increased to 69.2% by 2004 when President Bush was promoting home ownership, and relaxed lending standards enabled many people to buy their own property for the first time.
Sales of existing homes in the US dropped by 0.8% to a seven-month low in June, giving an annual pace of 4.77 million when the median projection was for 4.9 million.The shift towards renting is providing opportunities for buy to let investors as apartment vacancy rates dropped to just 6% during the second quarter, which is the lowest rate for over three years. However the majority of Americans still want to own their own homes, as this is an essential part of the American lifestyle.
By the end of March there were 112.2 million households in the US. According to the most recent data available nearly one third of the 76 million homeowners had no debt or mortgage on their home at the end of 2009, having achieved their American dream.