Home Ownership Rates at Historic Lows: Some Guesses Why


Home ownership rates are at levels not seen since 1967. And they are expected to move even lower in the next 10 years.

But why?

Interest rates are at historic lows right now.

There are far more loan products for people to use than 48 years ago.

Here’s one guess:

In 1967, a new home cost you $14,250.

The average household income in 1967 was $7,003.
And was earned by ONE person.

Which means that the average family paid about double their annual income to own a home.

Fast forward to 2015.

Average household income? About $51,000.
Earned by two people normally.

Average new home price? About $337,000 in May 2015.

Pulling out the calculator, that means that the average family, with two people working, must pay about 6 times their annual income to buy a home.

Is this the only factor? Nah. Home ownership was at record levels in 2004-2006 when the income to home price ratios were not much better than this.

But we ask you: do people prefer to rent if the cost to rent or own are the same, considering all factors? Nope.

And do you think it impacts home ownership when a home costs 6X your annual income? We think that answer is probably yes.

To watch a humorous discussion on these points (where much of the source data was found) see the video below

48 years later in


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