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Granted it's been nearly six years, but approximately 4.6 million homes went into foreclosure since 2008, according to CoreLogic. That's an incredibly high number to digest. Think about it - four point six Million Homes went into foreclosure in six years. It still sends shivers down my spine when I think about it. What's more alarming, is that most of those homeowners became renters. Even as housing is slowly recovering, credit tightened, pushing even more potential home buyers out of home ownership and into rentals -- apartments and single family homes.
There are now 43 million houses being rented, or 35 % of all U.S. households, the highest number in more than a decade, according to Harvard's Joint Center for Housing Studies. That's 4 million more renters today than there were in 2007. If you are between 25 and 54 years old, more of you are renting since the Harvard Center began record keeping in the early 1970's.
As a consequence, rental vacancies have fallen dramatically and rents have gone sky-high.
"We are in the midst of the worst rental affordability crisis that this country has known", said Shaun Donovan, U.S. Secretary of Housing and Urban Development.
Half of all U.S. renters today pay more than 30 percent of their incomes on rent. That's up from 18 percent ten years ago, according to the Harvard Center. For those with low incomes, the jump is even more dramatic.
"Over four years, we saw a 43 percent increase in the number of Americans with worst-case housing needs", according to Mr. Donovan. " Let's be clear about what that means, they're paying more than half of every dollar they earn for housing".
The numbers are not lost on Annie Eccles, who is in her late 20s. She has been renting for more than two years, and the rent on her Bethesda, Md., apartment has increased by the maximum the county allows every year.
Most young Americans, my assistant who is 38 years old included, want to be homeowners someday. Whilst so called millennials favor mobility and city living, they still see owning a home one day as a goal.
Eric Belsky, director of Harvard's Joint Center for Housing Studies, said that "nineteen out of 20 people that were surveyed say that they intend to buy a home at some point in the future, if they're under the age of 30"..." there is no question that the will toward home-ownership remains, it's the way".
Home prices are rising faster than expected, due to heavy investor demand, ironically. Whilst more than 3 million owner-occupied are now investor-owned rentals, there is still a lack of supply in the market. New rental inventory is coming soon ( fingers crossed!), but demand is not easing. Renters may want to be buyers, but many still can't yet because of rising home prices and mortgage rates.
"Then you add in other things, like higher student debt for many people, you add in the fact that incomes are low - and moderate-income people have not been going up as fast as inflation, and you have a situation where its going to be very difficult to buy homes", said Belsky.
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