[OPE] The change from mortgaging to renting in the USA

adsl675281@tiscali.nl

In September 2007 I tried to gauge the proportion of the change from mortgaging to renting in the US http://ricardo.ecn.wfu.edu/~cottrell/OPE/archive/0709/0203.html : "Thus, the possible 640,000 foreclosures would represent around 1.2% of the total number of mortgaged households, half a percent of total households."

The NY Times does now report a change of that order of magnitude:

"The percentage of households headed by homeowners, which soared to a record 69.1 percent in 2005, fell to 67.8 percent this year, the sharpest decline in 20 years, according to census data through the end of March. By extension, the percentage of households headed by renters increased to 32.2 percent, from 30.9 percent. (...) William C. Apgar, a senior scholar at the Joint Center for Housing Studies at Harvard University who ran the Federal Housing Administration from 1997 to 2001... said the Joint Center had predicted an increase of 1.8 million renters from 2005 to 2015, given expected population trends. Instead, they saw a surge of 1.5 million renters from 2005 to 2007 alone. In the first quarter of this year, 35.7 million people were renting homes or apartments, census data show." http://www.nytimes.com/2008/06/21/us/21renters.html?hp

You might say that with the aid of a pocket calculator you can beat Harvard, but that's not quite fair, because JCHS made their extrapolation way before I made my calculation. Dr Apgar himself notes that:

"Although the vast majority of all Americans are well housed, many Americans - both owners and renters alike - struggle to secure decent and affordable housing. Overall, 14.3 million households - or one in seven are severely cost burdened (spend more than 50 percent of their income on housing) and another 17.3 million are moderately cost burdened (spend 30 to 50 percent of their income on housing). According to the recently released State of the Nation's Housing Report, despite the unusually strong income growth in the 1990s, in 2001 some 95 million Americans had housing cost burdens or lived in crowded or inadequate housing. Indeed, more than twice as many people in this country now face housing problems as lack health insurance. And, on any given night, at least 850,000 people are homeless, while over the
course of a year, the number of Americans experiencing some period of homelessness - many of them children-is in the range of 2.5 - 3.5 million." http://www.jchs.harvard.edu/publications/markets/w04-11.pdf

If there is a crisis, this is socially or humanly speaking a more serious crisis than the crisis of people who used to own, and now have to rent. It is just that, because bankers staked a lot of profit on securitizations of mortgages, the subprime crisis mesmerized the world. 

Jurriaan

_______________________________________________
ope mailing list
ope@lists.csuchico.edu
https://lists.csuchico.edu/mailman/listinfo/ope