Homeownership rate of householders aged 30 to 34, second quarter 2016: 44.8%
The homeownership rate of households headed by people aged 30 to 34 fell to a new low in the second quarter of 2016. The 44.8 percent second-quarter homeownership rate was down from 45.7 percent in the first quarter of 2016 and well below the previous all-time low of 45.2 percent in the second quarter of 2015. The homeownership rate of the 30-to-34 age group had been fairly stable since hitting bottom in 2015. This new low could be a statistical bobble or a resumption of the downward trend.
Historically, homeownership became the norm in the 30-to-34 age group—rising above 50 percent. But beginning in 2007, the homeownership rate of 30-to-34-year-olds went into a tailspin. In the second quarter of 2011, the rate fell below 50 percent for the first time. It's been stuck there ever since. The new age of first-time home buying is 35 to 39, but even this age group has been slipping toward the 50-percent threshold. In the second quarter of 2016 the homeownership rate of 35-to-39-year-olds was 55.2 percent, barely above the all-time low of 55.1 percent recorded in the second quarter of 2015. The homeownership rate of 35-to-39-year-olds peaked in the first quarter of 2007 at 65.7 percent.
Nationally, the homeownership rate was 62.9 percent in the second quarter of 2016, down from 63.4 percent a year earlier and the lowest homeownership rate since 1965.
"Something happened on the way when the concept of “home” transmogrified to a financialized “asset class” whose price the government, the Fed, and the industry conspire to inflate into the blue sky, no matter what the consequences. And here are the consequences.
The Census Bureau, which has been tracking homeownership rates in its data series going back to 1965 on a non-seasonally adjusted basis, just reported that in the second quarter 2016, the homeownership rate dropped to 62.9%, the lowest point on record.
It matches the low point in Q1 and Q2 of 1965 when the data series began. At no time in between did it ever fall this low. And it was down half a percentage point from 63.4% a year ago.
The relentless slide has lasted for 12 years, from its peak of 69.2% in Q4 2004, which was when the Greenspan Fed’s low interest rates were boosting speculation in the housing sector, and prices were going haywire. At the time, the concept of “home” had already become an asset class that can never lose money, financialized and later shorted by Wall Street, subsidized by government agencies, and backstopped by the Fed.
And this is what happened to homeownership rates afterwards:
The 1.9% point drop from Q3 2014 (65.3%) to Q2 2015 (63.4%) was the largest 2-year drop in the history of the data series. It also coincided with steep increase in home prices.
On a seasonally adjusted basis, the homeownership rate dropped to 63.1% in Q2, the lowest in the non-seasonally-adjusted data series going back to 1985.
There are numerous reasons for this, some known and others still to be guessed at, including: •Rising home prices in an economy of stagnant wages (for the lower 80%) have pushed entry-level homes out of reach for many people. •Lower priced homes in many urban areas entail a huge and costly ($ and time) commute every day. And even then, these homes may be too much of stretch for big parts of the population in expensive urban areas. •First time buyers are having trouble saving for a down payment since they spend their last available dime to meet soaring rents. •Millennials have been blamed. They always get blamed for everything. They saw their parents deal with the American Dream as it turned into the American Nightmare, and they learned their lesson early in life. •The super-low interest rate environment hasn’t made homes more affordable because home prices, in response to super-low interest rates, have soared, and in the end, mortgage payments are higher than they were before. •Higher home prices entail other costs that are higher, including taxes, brokerage fees, and insurance.
The fact that Housing Bubble 2 in most urban areas is now even more magnificent than the prior housing bubble that blew up with such fanfare, even while real incomes have stagnated for all but the top earners, is a sign that the Fed has succeeded elegantly in pumping up nearly all asset prices to achieve its “wealth effect,” come heck or high water. In this ingenious manner, it has “healed” the housing market.
It’s 2-year bout of flip-flopping about raising rates just puts some lipstick on these policies that include the purchase of agency mortgage-backed securities, which the Fed continues to buy to replace those that mature and roll off its balance sheet.
Just today, as part of its routine, it acquired $2.6 billion in agency mortgage-backed securities. On July 26, it acquired $2.0 billion. On July 25, $1.9 billion; on July 22, $1.3 billion, on July 21, $2.5 billion; on July 20, $1.9 billion…. and so on.
As MBS mature and are redeemed, the Fed takes this money and goes to its primary dealers (list) and buys more of them, which puts downward pressure on mortgage rates and prevents the free market from playing any kind of role, all in the religious believe that inflating home prices beyond all recognition is somehow good for the economy and Wall Street, despite the consequences, such as plunging homeownership rates, as America turns from a country of homeowners into a country of renters, often dwelling in a corporate-owned financialized asset class.
At the luxury end, something new is hitting the housing market: Manhattan and Miami are already getting mauled. Now it’s expanding to San Francisco, Silicon Valley, Los Angeles, San Diego, even Texas! Read… US Government Mucks up Money-Laundering in Real Estate, Puts Luxury Housing Bubbles at Risk."
from: The Declaration of Independence: "all Men are...endowed by their Creator with certain unalienable Rights... to secure these Rights, Governments are instituted... whenever any Form of Government becomes destructive of these Ends, it is the Right of the People to alter or abolish it"
ConGM: Please direct me to the full article by Susan George. Or email to firstname.lastname@example.org.The provided link is broken. I'd like to read it in preperation for a course. Much appreciated.
Nov 13, 2017 15:19:23 GMT -6
ace comando: Well, it took me several days and a lot of code writing to sift through the millions of achieved pages on the Wayback Machine achieves. Was about to give up when a colleague gave me mining script to look at all archived pages whether displayed or not. And
Feb 24, 2017 19:44:10 GMT -6
unlawflcombatnt: I've now changed the colors on the board to something more readable. At least now readers can find the sign-in tab.
Jul 6, 2014 22:58:23 GMT -6
unlawflcombatnt: OldUser-the sign-in area is in the dark area immediately under the red section that says Economic Populist Forum. It's almost impossible to see, unless you know where to look. This was ProBoards idea, not mine.
Jun 12, 2014 11:52:53 GMT -6
OldUser: There's no link on here to sign on or login. Where'd it go?
May 29, 2014 8:44:44 GMT -6
jeffolie: One might short a bull ETF to gain the decay but this requires a margin position subject to changes imposed by the exchanges & brokers
Oct 26, 2013 13:26:07 GMT -6
jeffolie: Holding a stop loss in these algo dominated markets almost always means the algos will hit your stops
Oct 26, 2013 13:20:09 GMT -6
jeffolie: Even so, these leveraged ETFs do not create margin calls nor expiration dates thus allowing one to hold indefinitely
Oct 26, 2013 13:17:52 GMT -6
jeffolie: Yes, the ETF features fading/leveraged decay because the futures and/or options used decay plus the administrative costs rise the decay, declining value ... I accept this as a cost and feature of all ETFs that purchase futures/options to maintain price
Oct 26, 2013 13:15:38 GMT -6
mimzy: jeffolie ~ I've been reading/lurking you for a year or three now and was wondering if your could you explain how you overcome quantum fading/leveraged decay in your ETF short position of the DJIA?
Oct 25, 2013 20:46:26 GMT -6