Debunking The Housing Crash: Rising Homeownership Rates

The is the second article in our “Debunking the Housing Crash” series.

COVID-19 is one of the most deflationary global events to hit the earth since the meteor that took out the dinosaurs. When much of the United States and many other countries began enforcing stay-at-home orders, the economies of the world came to a grinding halt.

How is it then, that a deflationary event of this magnitude could not trigger a housing crash in the U.S.?

As deflationary of an event as COVID-19 has been globally, there are equal and potentially greater inflationary pressures currently pushing U.S. housing prices higher than they are today.

This series explores each of these pressures in detail.

Reason #2: Rising Homeownership Rates

Far too many young adults witnessed the pain associated with losing a home and the ensuing Great Recession in 2008. Imagine the psychological damage that can be dealt to a child or young adult as they watch their parents lose their homes and retirement funds while, in far too many instances, divorcing under the stress.

Not surprisingly, homeownership rates plunged in the United States from 2006 through late 2016. A decade of fear and recovery from the Great Recession, resulted in a wave of Millennials renting apartments and choosing low-risk savings vehicles like FDIC insured savings and money market accounts to place their money in.

However, since late 2016 the homeownership rate has been recovering and shows no signs of fatigue. As we approach ten years of consistent real estate appreciation, we are seeing renewed confidence in real estate as more renters become buyers.

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