The housing market is recovering, but don’t tell that to a large portion of the middle class.
The Wall Street Journal reports that home prices are just below the peak reached in July 2006, but that the homeownership rate is the lowest it’s ever been. The combination could be a disastrous one.
Due to high home prices, a dearth of available homes, and other financial handicaps (including damaged credit and massive student loan obligations), millions of aspiring homeowners are forced to rent.
If these conditions continue (and they might, because the homeownership rate is projected to fall to under 60 percent by 2050), the economy as a whole will suffer. Renters miss out on the benefits of owning a house, like retirement saving, wealth creation, and using home equity to pay for college tuition, vacations, and home renovations.