Monetary Policy

Homeownership: Back To Old '99

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You never hear anybody say they don't like Raleigh.

Bloomberg's Kathleen M. Howley breaks out numbers on the declining rate of homeownership in these here United States:

The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999…

The share of homes empty and for sale, known as the vacancy rate, was 2.5 percent, matching the year-earlier period and down from 2.6 percent in the first quarter, the Census Bureau said. The homeownership rate fell from 67.1 percent in the first quarter, the third straight decline. The rate reached a record high of 69.2 percent in the second and fourth quarters of 2004.

U.S. Census Bureau original [pdf]

There is another part of this story. While the rate of homeownership has been falling since 2005, the rate of so-called real homeownership—the percentage of equity Americans have in their homes—has been declining since the 1950s. So it's true that 60+ percent of Americans still have title to a house, but what they actually own is a bigger pile of debt (relative to the pile of house).

The decline in apparent home ownership may be a step in the right direction for the American people, one that is being taken despite the desperate machinations of Republocrats who make tragic common cause on the goal of boosting homeownership by any means necessary.

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  1. Wah? Is she related to Kerry Howley?

  2. Ron Klaus wrecked his house.

  3. But it was all worth it, right MNG? For teh dignity! Oh and then there’s the double-digit unemployment and vast quantities of wealth that were destroyed. For teh dignity!

    1. I thought wealth was never destroyed but just reallocated to more efficient areas or some such Austrian nonsense.

      Hey, I’m all for getting more people home ownership. But I didn’t tell the dumbass market to turn mortgages into financial products, overvalue them while underestimating the risk and go stupid on the whole thing.

      1. You didn’t tell them. But you cheered Barny Frank and the other crooks at Freddie and Fannie and the Fed to artifically inflate demand to create the conditions for that to happen.

        And no wealth doesn’t disapear. If I buy a ferrari I can’t aford, the wealth of the car doesn’t disapear when it is repossessed. But that doesn’t make buying it any less waste of money. And it also doesn’t make up for all of the things I lost in opportunity cost. The houses still being there doesn’t make up for the trillions of dollars in wealth we wasted pursuing the bizzare goal of universal home ownership.

        1. “But you cheered Barny Frank and the other crooks at Freddie and Fannie and the Fed to artifically inflate demand to create the conditions for that to happen.”

          Is that the meme still on the right? Even though private actors were jumping over each other to get in front of this? Interesting.

          “And no wealth doesn’t disapear. ”

          “doesn’t make up for the trillions of dollars in wealth we wasted”

          Wasted but not disappeared?

          1. Resources were allocated to build a house when there was likely a better use for them somewhere else.

            1. A better use for who? How can we know?
              And won’t the foreclosure process result in an efficient allocation of the resources?

              Man, this Austrian bullshit can actually be fun!

              1. And won’t the foreclosure process result in an efficient allocation of the resources?

                Indeed it does.

              2. A better use for who? How can we know??

                We can’t. That’s why we should let the market decide without fucking with it for poorly thought-out idealistic reasons and/or short term political gain. But you already knew that.

      2. “I thought wealth was never destroyed but just reallocated to more efficient areas or some such Austrian nonsense.”

        I’m sure you think that sounded cavalier and dismissive, rather than petulant and willfully ignorant.

        Wealth sure as shit can disappear. Just watch a Roland Emmerich film for simulated examples.

  4. Do two thirds of the people whose living situation you know own a place, even nominally? That number seems very fake.

    by any means necessary

    They won’t do it by letting housing fall back to anything like its undistorted market value. But I suppose that’s not “necessary.”

    1. Yes.

      Im trying to think of anyone I know who DOESNT own a place, even nominally.

      What are you, in NYC or something?

      1. Oh, thought of 1. Couple next door to my parents are renting a house…from my parents.

      2. But, because my social circle is much, much closer to 100% than 66% doesnt mean I assume the number is bogus.

    2. From longtime reading of the posts here I think the H&R rate of nominal home ownership is something like 20%. But one also learns there is a vast gulf between H&R and the real world…

      1. For thos of you new to the threads, no this is not a sock puppet. MNG really knows this little about economics and really has ideas that are this dumb.

        1. I didn’t realize knowing the home ownership rates of H&R posters was a major tenent of economics. Interesting.

          John, don’t you have reverse racists to falsely expose?

      2. Not only do I own the house that I live in, outright, I own another, outright, that I rented and am now trying to dump.

      3. For the record, I own three homes, two of which are completely paid for and the other is about 50% paid for…this is in a relatively high cost of living area as well (2000 sq. ft. home on 0.2 acre lot costing $300K+).

    3. One’s friends are never a valid sample, because similar people tend to flock together.

  5. Republocrats who make tragic common cause on the goal of boosting homeownership by any means necessary.

    More like “by means that do not work”.

    If one really wanted to increase home ownership the best results come from lowering the actual price of homes. You do that by eliminating land use regulations and government mandated artificial constraints to supply.

    1. Or, going back to real money, ie; gold and silver coin. Since the Federal Reserve, a private bank, began replacing our lawful currency with their play money, the dollar has lost 98% of it’s value. According to Dr. Walter Williams, in our country’s first 100 years, wholesale prices declined 6%. In the next 100 years, with The Fed in charge, wholesale prices have risen 1,600%. Now, let’s quit calling each other names, and hold the bastards in D.C. accountable for this robbery.

      1. We should just go back to gold coins and then build cheap houses out of the then worthless dollars!

        1. Never fear, we’ll soon be using dollars for fuel.

    2. + 1, Joshua

  6. Barney Frank loves fanny and Freddie.

    1. Good on the lower case fanny!

  7. How many bubble bursts must we live through before they realize that you can’t create an artificial housing bubble that never bursts?

    Since both parties can’t accept that there isn’t a way to create a bubble that will never burst, we are screwed.

    1. But we make people like MNG feel better about the dignity of home ownership. Yeah, it wastes trillions of dollars. But it makes MNG feel better. And that is what it is all about isn’t it?

      1. I think the term “onanistic altruism” fits.

      2. It makes the millions of homeowners feel better. And yes the point of wealth is to increase hapiness/welfare. Do you just want to roll around in it like Scrooge McDuck?

        1. Except they don’t actually own anything. And many are stuck with a mortgage they can’t afford. And then there are the millions impoverished by the current recession. Being mired in debt and unemployed aren’t the best self-confidence builders. But it did increase the self-confidence of smug regressives who will never have to consider the real-world effects of their idiocy. And that’s all that really matters.

        2. The trouble is the dignity of homeownership has to be earned. When it’s given to anyone who can fill out an application, the end result is anything but dignifying.

          Regardless of who is to blame, the current financial crisis has roots in the fact that loans were given to people who couldn’t afford them. All the banks with their derivitives, credit default swaps, etc. would still be going merrily and securely along had they required at least 10% down, proof of income, and sensible affordability.

          Be honest, though, had banks required responsibility at a time when home prices were rising, you and other dems would have have accused them of cruelty, racism, sexism, and God knows what else.

  8. We would boost home ownership and real home ownership if we got rid of burdensome zoning and regulations.

  9. I agree. The prices of below code houses would be quite low. The term “fire sale” comes to mind! And houses next to pig farms would be going like bacon!

    1. Do you have a degree is strawmanology?

  10. Easy come, easy go as they say.

  11. I’m entirely unconvinced that increased home ownership as an end in itself is a social good; from where I’m sitting, which is in a rented duplex, anybody who feels driven by the notion of owning their own home will find a way of doing so that is within their means. It isn’t something that the government has to push truly interested people into doing. People who need to be coaxed into the housing market through various incentives are often people who never previously gave home buying much thought at all. Somebody who hasn’t given a lot of thought in advance to long-term planning and who owns a house more by accident or whim than by design is not somebody who is likely to prioritize making mortgage payments when times get tough. When I look at the foreclosure notices in my local paper, the names I recognize tend to be people who, in their pre-ownership days, paid their rent with the help of government housing subsidies. How anybody could fail to see this as a recipe for disaster is beyond me.

    If the rationale for getting people into their own homes is that it makes them feel better about themselves, wouldn’t it be cheaper and quicker for all involved to have the government start subsidizing salon visits instead? All that’s needed to start the process of making manicure vouchers a reality is a program name of sufficient length to meet federal snappy acronym guidelines.

    1. There’s long been an argument by at least moderate libertarians that home ownership makes the owners more libertarian, or at least better politically in some way — the “freeholder” idea. It’s a little hard separating cause from effect there, though, when looking for evidence on the politics of different areas with different rates of home ownership vs. rental.

  12. Tim Cavanaugh, do you own a home then or are you a raging hypocrite?

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