Financial pressures might have pushed more Americans toward renting and lower rates of homeownership but that does not mean attitudes have shifted away from homeownership. From an overview of housing ten years after the burst housing bubble:
“There’s a remarkably high preference for homeownership that shows up in every survey of renters,” says Chris Herbert, managing director of the Joint Center for Housing Studies of Harvard University. “Ninety percent or so of renters still want to become homeowners. Certainly, young people are moving into homeownership more slowly, but that’s because of a host of reasons such as marrying and having children later, a reduced ability to save since the recession and that it’s harder to get a loan. It’s not because of a fundamental change in attitude.”
Let’s assume this desire for owning a home continues for at least a few years – and this is a consistent desire across multiple decades already. What might this lead to? Two different paths:
- The economy improves to the point where those who want to buy a home are able to. This may be difficult to imagine given the availability of high-paying jobs plus the return of housing prices to 2000s levels. Yet, homeownership has been higher in the past and might be again in the future as this is what Americans want. Historically, the federal government has helped Americans reach this goal.
- A changing economy plus high housing prices mean relatively few of those who want to own a home will be able to. Younger adults become frustrated by their inability to purchase a home, particularly compared to previous generations. They take out that frustration in various ways, perhaps including higher levels of stress or taking it to the polls (though I argue it will be difficult to have a national conversation about housing and proposals to address housing are often unpopular).
The homeownership rate will be very interesting to watch in the next ten to twenty years. While Americans promoted homeownership for over a century now, there is no guarantee it has to continue into the future if conditions make it very difficult for average residents to buy a house.