Homeownership

Graph from FactSet in 1/17/12 article by:

Liz Ann Sonders, Senior Vice President
Chief Investment Strategist
Charles Schwab & Co., Inc.

This graph speaks volumes!

HUD News release 97-107 June 23, 1997

in part....... "The Urban Homestead initiative is part of the National Homeownership Strategy launched by President Clinton in 1995. The strategy brings all levels of government, the housing industry, lenders and non-profit groups together to increase the national homeownership rate to an all-time high of 67.5 percent by the year 2000. Sixty-two national groups joined HUD to form the National Partners in Homeownership."


"Over the last two years the strategy has helped create 2.5 million new homeowners, while the nation's homeownership rate has grown to 65.4 percent -- the highest annual rate since 1980. Currently, a record 66.3 million American families are homeowners. The number of American homeowners has grown by 4.7 million since President Clinton took office."

From 1965 - 1995, the homeownership rate was in the mid-60% range. In 1995, the homeownership rate made its steady climb to the height of the bubble. The continued increase is due to a continued federal policy, predatory lenders, and unethical practices.

It would seem that the market is adjusting back to a norm. Unfortunately, many of those homeowners that lost their homes were a victim of the economy and lost their source of income. those owners that pursued foreclosure, short sale or filed bankruptcy will be out of the housing market for many years. It would be best if these homeowners stayed in their homes as a renter.

This again is telling me that there will be a shortage of multifamily and single family homes and the pent-up demand will drive prices higher and quickly.