Chart inserted by Money Talks
If a new survey proves accurate, home sellers and hungry real estate agents won’t have many “renters-wanting-to-be-owners” prospects anytime soon:
“More than a quarter of Americans currently renting houses and apartments have no intention to ever buy a home, according to a survey published on Wednesday [8/18}…The survey, by real estate search site Trulia.com, found 27 percent of renters do not plan to ever buy a home. Although 72 percent still expect to buy eventually, that proportion is down from 77 percent six months ago…Of those who do hope to become homeowners, two-thirds say they will wait two years or more.” — Reuters (8/19)
What’s more, the article goes on to say that this lack of interest in home ownership among renters is growing despite the fact that:
“U.S. home loan rates are the lowest since record-keeping began in 1971. The average 30-year rate fell to 4.44 percent in the week ended August 12, according to loan company Freddie Mac.”
Renters have long been a key source of potential home buyers. So this survey is grim news for anyone hoping for a quick recovery in the real estate market.
And, if the economy becomes more depressed, another source of home buyers would dry up — namely people who would move if they were offered a new job. And “mover uppers” who already own a home may also decide to stay put.
Indeed, if the economy keeps going downhill, surveys of renters in the next 6-12 months could show even less inclination to buy a home. Here’s what Robert Prechter wrote in the second edition of Conquer the Crash (pp. 151-152):
“In a depression, buyers just go away. Mom and Pop move in with the kids, or the kids move in with Mom and Pop. People start living in their offices or moving their offices into their living quarters.”
And what if the stock market is headed south? Prechter continues: “Real estate prices have always fallen hard when stock prices have fallen hard.”
If the stock market trend is a reliable indicator of real estate prices, those of us with real estate interests would do well to watch the stock market.
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