Home Ownership Still Alive in US

There are many variations about the origins of the “reports of my death” quote by Mark Twain.

We do know, however, that a note was written in May 1897.  It included scribbles and cross-outs and of course the famous line “The reports of my death have been greatly exaggerated”.  In this note, Mr. Twain was clearing up confusion about an obituary; that apparently was intended to be about his cousin, not him.

Given this background, the death of the American homeowner has also been greatly exaggerated.  Since the housing bubble burst several years ago, many so-called experts have predicted the end of home ownership as an important part of the American Dream.

As we approach spring 2013, these dire forecasts have not come to pass.  Let’s take a look at some of the most common:

Dire Predication:

After the housing crash, Americans would no longer believe in home ownership and what it has to offer.

Current Reality:

While home ownership has indeed fallen from a high of 69% in 2004 to 65% at the end of 2012, the desire to own a home is still strong.  According to several surveys:

• 73% of Americans say it is a good time to buy a home. (Fannie Mae)

• In every age group from 25 to 65 years old, over 80% plan to buy a home in the future. Additionally,  76% of those over 65 plan to buy a home in the future. (Joint Center for Housing Studies at Harvard University)

Dire Predication:

Those families that were forced from their homes during the housing crash would never look at home ownership in a positive light again.

Current Reality:

• Many of the sellers who lost their home to a short sale or foreclosure over the last six years are re-entering the housing market as buyers. It is projected that over 700,000 people in this category could be in the market for a home in 2013 and that the number will more than double to over 1.5 million in 2014. (Moody’s Analytics)

• Nearly 80% of those homeowners who decided to strategically default (walking away from their house and mortgage) over the last few years have expressed a desire to buy a home again within the next 12 months. (YouWalkAway.com)

Dire Predication:

Young adults, after seeing their parents suffer major loses of equity, would not embrace home ownership especially as a financial investment.

Current Reality:

Recent studies have actually consistently proven that just the opposite is true:

• 72% of young adults between 18-35 years old see home ownership as part of their personal American Dream. (Trulia)

• 75% of young adults between 18-35 years old see home ownership as an indicator of success. (Realogy)

• 94% of young adults under 25 and 96% between the ages of 25-34 plan to buy a home. (Joint Center for Housing Studies at Harvard University)

• 79% of young adults under 25 years old and 86% of young adults 25-34 believe that owning is a better financial decision than renting. (Joint Center for Housing Studies at Harvard University)

Reference: The KCM Blog