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News Link • Housing

The Rent Isn't Too Damn High

• http://lewrockwell.com/
 

Today's news that national housing prices have double-dipped to a new recession-era low is grim for homeowners, home sellers, banks, builders, and the president. Prices are down in 19 of the 20 biggest metro regions – Washington, D.C., is the exception. And given the 1.9-million-house backlog in the foreclosure pipeline, nobody expects prices to rebound any time soon.

But these data can be interpreted another way. The American economy is making a significant shift from buying to renting, and that may ultimately be good news. According to a USA Today analysis of Census data released this weekend, since 2006, the number of households that rent has grown by about 700,000 a year, while the number of households that own has fallen by about 200,000 a year. One reason is macroeconomic. The unemployment rate remains high and wages are down, meaning many people simply cannot afford to buy a house. Plus, nobody wants to take the risk of selling into a down-market. But there are also indications that Americans are electing to rent – and that is a very good sign.

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