You've probably read all about Americans dropping the idea of homeownership in favor of renting. The U.S. homeownership rate now stands at just 64 percent, the lowest since 1989.
But it's not just happening here in the United States. "Home ownership is falling right around the world,"
writes Matthew Lynn of The (London) Telegraph. "It is down dramatically in ... Australia, in Ireland and in many other countries as well."
So what gives?
"There is a global shift away from home ownership that may have as much to do with changing demographics, work and migration patterns, and global interest rates," Lynn explains.
"And the lesson from that is we should try to intervene as little as possible in the housing market, and let consumers decide the right balance between owning and renting."
Home prices may be headed lower in developed countries, as they are entering a long period of falling population, Lynn says.
As for the United States, our drop in homeownership isn't a cause for consternation, says Yahoo! Finance
columnist Rick Newman.
"What’s really going on is the last bit of air squeaking out of a 20-year housing bubble that obscured the pitfalls of owning a home, while exaggerating the virtues," he writes.
"The homeownership rate is now back to its historical average — where it probably ought to be."
A high homeownership doesn't necessarily have much to do with a strong economy, he notes.
"It’s very clear, meanwhile, that buying a home is a huge commitment of money, and that it also locks the buyer in place for several years, at a minimum, unless taking a loss on a quick resale is no big deal."
Homeownership doesn't make sense for everyone, Newman points out. A mortgage "can be a disastrous commitment for those who are unprepared."
The median price of an existing, single-family totaled $205,200 in the first quarter, up 7.4 percent from a year earlier, according to the National Association of Realtors. Median prices rose in 148 of 174 metropolitan areas the NAR follows.
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