Research from the Urban Institute identifies market and demographic trends that could mean a future housing market that will stand in stark contrast to the "subprime mania of the early 2000s."
"Last decade’s housing crisis could give way to a new one in which many families lack the incomes or savings needed to buy homes, creating a surge of renters and a shortage of affordable housing," according to an article by Nick Timiraos.
The article follows research fro the Urban Institute, "which predicts homeownership will continue to slip for at least 15 years" due to demographic trends that will see more households created by minorities with lower incomes, less wealth, and lower homeownership rates than average. "The downtrend would push homeownership below 62% in 2020, and it would hold the rate near 61% in 2030, below the lowest level since records began in 1965."
The flipside of a downward trend in homeownership rates is an increased number of renters, which leads to higher rents as a response to the increased demand.
Timiraos also notes that economists at Goldman Sachs dissent from the predictions of the Urban Institute. "They noted in an April report that even though Hispanics, for example, have lower homeownership rates than non-Hispanic whites, those rates have been rising for the past four decades. They see the homeownership rate stabilizing next year after it falls to 63.5%."
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