Couple of interesting charts from Prof. Mark Perry …
The home ownership rate in the US has fallen to about 65% … down from a peak over 69% during the housing boom & bubble.
Couple of observations:
- With roughly 120 million households, that converts to about 5 million housing units … a rough indicator of how many folks bought homes that they couldn’t afford – either from the get=go or impacted by the recession
- Big question: have we reached bottom or do we have another 1% – 1 million units – to go? Lots of analysts are saying we’ve reached bottom … but that requires an inflection point, right?
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Note surprisingly, home prices map closely with the homeownership rate … except for the past couple of periods – with house prices trending up and homeownership still trending down.
- Is the recent home price strength just a blip that will fall back into pattern?
- Or, are home prices a leading indicator that we’ve reached bottom?
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