Five Root Causes for Depressed Homeownership Rate in the U.S.
The National Association of REALTORS recently held the Sustainable Homeownership Conference at the University of California, Berkeley, where a group of experts discussed potential ways to reverse the decline in homeownership. During the meeting, the five main reasons why would-be buyers are locked out of the housing market were discussed. The reasons are:
- Post-foreclosure stress disorder – The Great Recession caused long-lasting psychological changes in the financial decision-making for the estimated 9 million homeowners who lost their homes to foreclosure and the millions who lost their jobs.
- Mortgage availability – Credit standards have not normalized since the recession, and borrowers with good-to-excellent credit scores are not getting approved at the rate they were in 2003.
- Growing burden of student loan debt – Repaying student loan debt is making it difficult for young households to save for a down payment and qualify for a mortgage.
- Single-family housing affordability – Lack of inventory, high home prices and high rent are causing decaying affordability conditions in many markets.
- Single-family housing supply shortages – An inadequate level of homebuilding has led to a cumulative deficit of nearly 3.7 million new homes over the last eight years.
Read the white paper “Hurdles to Homeownership: Understanding the Barriers” for more information about current influences on the housing market. Speak with REALTORS® about their recent clients and if they had delays entering the housing market. Interview local renters about their plans to buy a home and what, if anything, is holding them back.