Melissa SIm, Shit Times leeporter moron gets paid to talk cock about how owning a home is a pipe dream in the US? Why don't she do an article about how home ownership is a pipe dream in Singapore first. Elections must be coming. SHit Times is starting to portray PAP in a favourable light with ridiculous articles.
The dream of owning a home is still beyond the reach of the average American, even though the lower rates of unemployment may signal an uptick in the US economy.
The seasonally adjusted home ownership rate for the last quarter of 2014 slipped to 63.9 per cent, the lowest in 20 years, according to the US Census Bureau. At its peak in 2004, home ownership stood at 69.4 per cent.
Real estate and finance experts said this is a result of stagnant wages, stricter lending standards after the sub-prime crisis and a younger generation that is already burdened by debt and less inclined to buy a home.
Professor Kerry Vandell, director of the Centre for Real Estate at the University of California, Irvine, said: "Today, we are still experiencing the fallout from the financial crisis in a continuing slow decline in home ownership rates."
While the unemployment situation in the United States improves - unemployment rates are 5.7 per cent now compared with 10 per cent during the recession in 2009 - wages have yet to keep up.
Average hourly earnings in the private sector amounted to US$24.57 (S$33.34) in December last year, up just 1.65 per cent from the year before.
According to a report by the Pew Research Centre, this is low compared with the pre-Great Recession years of 2006 and 2007, when average hourly wages often increased by around 4 per cent year on year.
Getting a loan is also proving to be difficult for prospective home owners as banks are generally more careful about lending to those with less-than-stellar credit scores and require buyers to make larger down payments.
"Lending terms remain very strict, and 'sub-prime' and other non-traditional loan products that promoted a broadening of home ownership have disappeared," said Prof Vandell.
Younger buyers are even less likely to buy because they "haven't yet built up their strong credit history, and have yet to save enough to meet higher down payment requirements", said Professor Stephen Malpezzi from the James A. Graaskamp Centre for Real Estate at the Wisconsin School of Business.
For Ms Davena Culberath, 28, who works as a concierge, paying off her student debt is preventing her from securing her own home.
"The goal is to buy something in the next five years. By then, I would have paid off a third of my student debt and my credit rating would be higher," said Ms Culberath, who is renting an apartment in Washington, DC, at the moment.
She falls in the under-35 age group, which experts said is the main group that has shied away from the property market.
The home ownership rate for that demographic dropped to 35.3 per cent in the last quarter of 2014 from 36.8 per cent a year ago.
In comparison, the change in home ownership rate from 71.4 per cent to 70.5 per cent for those aged 45 to 54 over the same period was not statistically different, according to the Census Bureau.
One reason for the decline in young buyers, said Associate Professor Tom Geurts, who teaches real estate and finance at the George Washington University, is that their mindset is less oriented towards owning things.
"This generation does not seem to want to be encumbered by physical possession, hence they own things virtually. As an extension, they might prefer to rent versus own," he said.
That argument is also bolstered by rental vacancy numbers which dropped to 7 per cent in the last quarter of 2014 from 8.2 per cent a year back.
Ms Emily Martin, 28, a marketing associate, is a case in point. She rents an apartment in Washington, DC and said she prefers it to owning a home.
"I like to travel, so this gives me the flexibility. It's easier than owning a place. Also, renting is cheaper on the onset," she said.
But some realtors said young people are beginning to jump back into the market as programmes come on stream to help first-time buyers.
Last December, mortgage finance firms Fannie Mae and Freddie Mac announced that first-time buyers could qualify for loans with down payments of as low as 3 per cent.
Ms Priyanka Ripley, a realtor with Long & Foster, said: "I'm pretty optimistic that young people still want to own. With these programmes in place and rates still low, it will be easier for millennials," she said.
However, Professor Susan Wachter, who teaches real estate and finance at the Wharton School, noted that young Americans would "take a longer time to get there" - owning homes in their 30s instead of their 20s.
But even if home ownership rates do bounce back, most real estate experts believe they will languish at around 64 per cent, calling that the "new normal".
Said Prof Vandell: "We are gradually moving to a new equilibrium in the housing and home ownership market. Barring new policy interventions to again stimulate home ownership, it will stay at about that level."
The dream of owning a home is still beyond the reach of the average American, even though the lower rates of unemployment may signal an uptick in the US economy.
The seasonally adjusted home ownership rate for the last quarter of 2014 slipped to 63.9 per cent, the lowest in 20 years, according to the US Census Bureau. At its peak in 2004, home ownership stood at 69.4 per cent.
Real estate and finance experts said this is a result of stagnant wages, stricter lending standards after the sub-prime crisis and a younger generation that is already burdened by debt and less inclined to buy a home.
Professor Kerry Vandell, director of the Centre for Real Estate at the University of California, Irvine, said: "Today, we are still experiencing the fallout from the financial crisis in a continuing slow decline in home ownership rates."
While the unemployment situation in the United States improves - unemployment rates are 5.7 per cent now compared with 10 per cent during the recession in 2009 - wages have yet to keep up.
Average hourly earnings in the private sector amounted to US$24.57 (S$33.34) in December last year, up just 1.65 per cent from the year before.
According to a report by the Pew Research Centre, this is low compared with the pre-Great Recession years of 2006 and 2007, when average hourly wages often increased by around 4 per cent year on year.
Getting a loan is also proving to be difficult for prospective home owners as banks are generally more careful about lending to those with less-than-stellar credit scores and require buyers to make larger down payments.
"Lending terms remain very strict, and 'sub-prime' and other non-traditional loan products that promoted a broadening of home ownership have disappeared," said Prof Vandell.
Younger buyers are even less likely to buy because they "haven't yet built up their strong credit history, and have yet to save enough to meet higher down payment requirements", said Professor Stephen Malpezzi from the James A. Graaskamp Centre for Real Estate at the Wisconsin School of Business.
For Ms Davena Culberath, 28, who works as a concierge, paying off her student debt is preventing her from securing her own home.
"The goal is to buy something in the next five years. By then, I would have paid off a third of my student debt and my credit rating would be higher," said Ms Culberath, who is renting an apartment in Washington, DC, at the moment.
She falls in the under-35 age group, which experts said is the main group that has shied away from the property market.
The home ownership rate for that demographic dropped to 35.3 per cent in the last quarter of 2014 from 36.8 per cent a year ago.
In comparison, the change in home ownership rate from 71.4 per cent to 70.5 per cent for those aged 45 to 54 over the same period was not statistically different, according to the Census Bureau.
One reason for the decline in young buyers, said Associate Professor Tom Geurts, who teaches real estate and finance at the George Washington University, is that their mindset is less oriented towards owning things.
"This generation does not seem to want to be encumbered by physical possession, hence they own things virtually. As an extension, they might prefer to rent versus own," he said.
That argument is also bolstered by rental vacancy numbers which dropped to 7 per cent in the last quarter of 2014 from 8.2 per cent a year back.
Ms Emily Martin, 28, a marketing associate, is a case in point. She rents an apartment in Washington, DC and said she prefers it to owning a home.
"I like to travel, so this gives me the flexibility. It's easier than owning a place. Also, renting is cheaper on the onset," she said.
But some realtors said young people are beginning to jump back into the market as programmes come on stream to help first-time buyers.
Last December, mortgage finance firms Fannie Mae and Freddie Mac announced that first-time buyers could qualify for loans with down payments of as low as 3 per cent.
Ms Priyanka Ripley, a realtor with Long & Foster, said: "I'm pretty optimistic that young people still want to own. With these programmes in place and rates still low, it will be easier for millennials," she said.
However, Professor Susan Wachter, who teaches real estate and finance at the Wharton School, noted that young Americans would "take a longer time to get there" - owning homes in their 30s instead of their 20s.
But even if home ownership rates do bounce back, most real estate experts believe they will languish at around 64 per cent, calling that the "new normal".
Said Prof Vandell: "We are gradually moving to a new equilibrium in the housing and home ownership market. Barring new policy interventions to again stimulate home ownership, it will stay at about that level."
