What happened was that investors were paying all cash and buying up properties to rent out.
But, as the Fed pumped more money into the economy, prices rose and Housing Bubble 2.0 was created. Then this year it started to fracture and now-
Home prices crash 10% in one month!
Housing Bubble 2.0 Has Popped
And for some, that had become the next American dream.
Housing Bubble 2.0 came into full bloom, but now it too has popped.
Given the high home prices, in many cases it may be a better deal. And apartments are often centrally located, rather than in some distant suburb, cutting transportation time and expenses, and allowing people to live where the urban excitement is. Millennials have figured it out too, as America is gradually converting to a country of renters.”
So in its inexorable manner, homeownership has continued to slide. This is what that relentless slide looks like:
Homeownership Rates at 1995 Levels
Under Age 35 First Time Homebuyers Has Dropped 7%
“Homeownership since 2008 dropped across all age groups.
But the largest drops occurred in the youngest age groups. In the under-35 age group, where first-time buyers are typically concentrated, home ownership has plunged from 41.3% in 2008 to 36.0%.”
These young people are forced to live at home, often not being able to find jobs that will even afford them a rental apartment.
Only Homes Over $1 Million Have Appreciated in Price
Despite low and skidding homeownership rates, home prices have been skyrocketing in recent years, and new home prices have reached ever more unaffordable all-time highs.
Investors, all cash buyers and corporations, that constituted about 1/2 of all housing purchases in many areas, has died.
- All cash sales fall to 6-yr low in June – that’s your investment buyer/flipper, which make up 50% of all home sales
- home sales have dropped by 9 percent since last year
- Homes under $1 Million have depreciated in the last year (see chart above)
- Overall mortgage applications have been falling steadily for over a year (see chart above)
- NEW home mortgage purchase applications plunged 9% in August
- Student loan debt alone could reduce home sales by 8% this year
- Foreclosures are starting to climb
- Inventories are increasing
- New multi-family home building (Housing Starts) plummeted and single-family bottom-bounced