Home ownership numbers might decline

Housing post-collapse

Steve Hawley, Feb 03, 10.

In the aftermath of the housing collapse, more Americans will be looking to rent rather than own houses, according to an Urban Land Institute (ULI) expert cited in the Wall Street Journal.

John K. McIlwain gave a presentation in Washington, DC, saying that home prices will fall another 10 percent this year, leading to even more foreclosures. Many Americans will owe more on their homes than the houses are worth, leading them to reconsider the “American Dream” of home ownership. He also expects house appreciation rates to fall to one or two percent.

“This disillusionment over homeownership as a way to build wealth could persist for decades to come, as those entering the housing market will be more apt to rent longer, and to place more emphasis on buying for shelter rather than investment purposes,” said McIlwain. “The age of suburbanization and growing homeownership is over.”

The presentation was based on McIlwain’s recent ULI report called “Housing in America: The Next Decade.” Its executive summary notes:

As the economy recovers, markets will stabilize but the old “normal” will not return. Once nascent trends will emerge as major drivers, creating new markets in new places. Those who fail to understand these new trends will miss opportunities or find themselves building what is no longer in demand.

ULI report: Housing in America: The Next Decade