American turning into a nation of renters? A growing number of Americans can’t afford a home or don’t want to own one, a trend that’s spawning a generation of renters and a rise in apartment construction. The proportion of U.S. households that own homes is at its lowest point since 1998 and going lower. When the housing bubble burst four years ago, 31.6 percent of households were renters. Now, it’s at 33.6 percent and rising. Since the housing meltdown, nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard’s Joint Center for Housing Studies and The Associated Press.
All told, nearly 38 million households are renters. There is over 2 million of unsold homes left on the market today so the situation will not get better soon for home owners. The consumption rate is around 500k homes per year. So America does not need to build another home for another four years.
Of course this one day will change. As traders we know that no trend continues for ever, though the current trend can go longer than you can stay solvent. The key point here is that this is just one more stair step down for the American middle class. The economic crisis has forced owners to become renters. When the market does return they will not be ready to go back into the market and will be subject to those who have the cash and are busy buying up property at bargain basement prices now – primarily as rental units. Only rich or upper middle class people will be able to own a house in the future. This in effect is creating a structural renter middle class in America.