Home Ownership Loses Luster

Inquiring minds have been seeing this more lately. And now its the LATimes reporting it.

Skittish after seeing home prices crater and eager to put money aside for a retirement that won’t include pensions, working-age people are increasingly skeptical about buying a home.

Surveys tend to support the premise. Two-thirds of Americans still see a home purchase as a safe investment, but that’s down from 83% in 2003, according to a study by Fannie Mae. Homeownership has fallen to 66.5% of the adult population, down from down 69.2% in 2004. A Harris Interactive polls says 70% of Americans aspire to homeownership, down from 77% a year ago.

The economic downturn and stricter mortgage standards are driving much of that decline, but economists say there’s also a growing belief among many that they can live better by renting rather than straining their finances to buy a house.

The National Association of Realtors has reported that only 33% of home sellers are looking to purchase a home.

This is good news when considering the cycles of a market cycle since it means that capitulaton is beginning to happen. And that is something that precedes a market bottom.


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