The Great Housing Reset

My Wall Street Journal column today asked: "Is Homeownership Overrated?" And NPR's Planet Money's Question of the Day asks: "Is Owning a Home Overrated?"

The rate of homeownership in America is already starting to fall back on its own. From a high of almost 70% during the bubble years, homeownership has fallen to roughly 67%; slightly less than 39% of Americans between ages 18 and 35 own their own home, down from 43% in 2005. The Urban Land Institute projects that homeownership may fall to 62% over the next decade or two.

I'm not saying that Americans should give up on homeownership. Those who plan to stay in one place, who have secure jobs, and who can afford to should still buy homes. We need only tilt the balance, reducing the current homeownership rate from our current rate of just over two-thirds to perhaps 55% or 60%, comparable to that of the most economically vibrant regions. It's in our economic interest to help make that happen.

A new study by the American Apartment Association (via Bob Massey) provides data from a May Harris survey of 2,000 Americans finding additional evidence of an ongoing Great Reset around housing.

  • More than three-quarters of those surveyed felt renting was preferrable to owning in the current economic environment.
  • Nearly two-thirds cited not having responsibility for major repairs or maintenance as the primary advantage for renting.
  • 50 percent offered financial reasons for preferring to rent.
  • A third cited the unpredictable real estate market and not being susceptible to foreclosure.
  • 60 percent of renters plan to continue renting their current residence or rent new residences within the next year, and just 12 percent have plans to buy.
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Richard Florida is Co-founder and Editor at Large of CityLab.com and Senior Editor at The Atlantic. He is director of the Martin Prosperity Institute at the University of Toronto and Global Research Professor at NYU. More

Florida is author of The Rise of the Creative Class, Who's Your City?, and The Great Reset. He's also the founder of the Creative Class Group, and a list of his current clients can be found here.

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