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Renting vs Owning: High Rental Costs Are Killing Americans

High Rental costs driving population shifts

Renting vs Owning:

Let’s look at a random story that many readers might find interesting before exploring the main story

We are still not convinced that Gold is fully out of the woods.  Peter Schiff is busy telling everyone that it was a bad idea to have sold Gold in 2011 and that it would $2,000 by 2009 and $5000 by 2013.  We beg to differ for the trend indicates otherwise, and so does the price of Gold;  Gold never traded to $2000, let alone $5000 in the stated time frames.   

He is coming out with scary scenarios though they are not as grandiose as James Sinclair’s scenario that calls for Gold to move to $50,000 an ounce. Even, when we dream we find it hard to envision such a price, so it is interesting that he can come up with such targets without being under the influence of some strong medicine.  This is nothing but fear-mongering, and the markets are ruthless to those who are driven by fear or euphoria.  Gold Bugs think & stop listening to Fear mongers 

Renting vs Owning: The real issue is qualifying for a mortgage

Soaring rents are affecting people worldwide and not only in America.  The situation is going from bad to worse in Africa and appears to be almost out of control in London, England. Making matters worse in the U.S is the difficulty most home buyers face in getting approved for a mortgage.

Prior to the crisis, all one had to do was simply scratch their name on the signature line and put down an income they needed in order to get approved for the loan as nothing was verified. However, from checking nothing, the banks have decided to check everything and this has effectively made it impossible for a  large swath of the population to own a home.

The video below illustrates how bad things are in England and with the immigrant crisis set to worsen in the years to come, there appears to be no light at the end of the tunnel for those hoping for lower rental.  The housing crisis will continue to worsen.

Renting vs Owning a home: Is It better to rent

Families Face a Growing Rent Burden

Nearly 43 million U.S. households rented their homes in 2016, including about 9 million households that were formed over the preceding decade, according to the Harvard Joint Center for Housing Studies. Demand for rental properties has increased across age and socio-economic groups since 2008.

Nearly two-thirds (64 per cent) had less than $400 cash in the bank; most (84 per cent) of such households are African-American-headed.

Half had less than $10 in savings across various liquid accounts, while half of the homeowners had more than $7,000. Pewtrust

Cost Of Housing Hitting families hard

In just two generations, homeownership in the United States has improved by 20 percentage points, according to US Census data. But young people now are struggling to afford the same homes their parents could afford at their age.

The median home price in 1950, was 2.2 times the average yearly income. In 2013, a few years after the worst housing market crash in a century, median home prices had already risen to 3.7 times the average income. Largely, this inflexible cost has been paid for with greater private debt. Between 1949 and 2018, mortgage debt as a percentage of GDP grew from 15% to 80%.   weforum.org

Other articles of interest:

College Graduates Drowning in debt refuse to give up luxuries (May 1)

China launches a civilized tourist program (April 29)

Alibaba poised for Strong growth & continued success (April 28)

Innovations Key Growth driver for China’s new economy States Brookings (April 26)

China-Pakistan Economic Corridor moving forward (April 24)

Cooperation essential for Nuclear Security (April 23)

China takes a pragmatic approach to Green Energy (April 22)

Report by CSIS on China Belt & Road worthless (April 20)

 

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