In recent homeowner news…Homeownership
fell to its lowest rate in 15 years during the first quarter. As more and more
borrowers lose their homes to foreclosures they are forced to rent. According
to the latest Census Bureau data, the percentage of Americans who are
homeowners dropped a full percentage point over the past 12 months to 65%
during the first three months of 2012. It’s the lowest rate since 1997.
This should not be
surprising to hear. Foreclosures have been growing over the last six years. The
rental vacancy rate dropped to 8.8% during the first quarter. Because of this
change, rental markets have experienced added pressure. Many investors are now
buying up distressed buildings, fixing them up, and renting them. House
flipping is back, but instead of houses, people are remodeling rental
apartments.
The census last quarter
reported that the median asking rent was $721, which was up by 5.6% compared to
12 months ago. It was found that rents were highest in the Northeast with an
average of $932. In the West, average rent was $845; in the south, average rent
was $660; and in the Midwest, average rent was $607.
Furthermore, home prices are
continuing to fall. All age groups, races and regions have experienced a loss
in homeownership. In this economy, many households cannot even afford rent,
leaving them on the streets.
According to the National
Coalition for the Homeless, each year 3.5 million Americans experience
homelessness. On any given night, 700,00 people are homeless in the HUD
Homeless Support Services Network.
The National Coalition for
the Homeless believes that the shortage of affordable rental housing and the
increase in poverty are largely responsible for the growing number of homeless
people. The problem lies not only in the lack of proper housing facilities, but
in the mental and physical wellness of the homeless, who have been struggling
with personality disorders and substance abuse.
It is unfortunate to know
that the number of homeless families with children has significantly increased
over the past decade. Households with children are the fastest growing segments
of the homeless population. The number of families experiencing homelessness is
rising while the number of affordable housing units is shrinking. More and more
families are forced to stay in shelters for longer periods of time. For
example, in the 1990s, families stayed in homeless shelters for an average of
five months before moving on to permanent housing. Today, the average stay is
5.7 months. Some surveys reported that it was closer to a year.
Because housing takes up a
significant portion of income, households must often sacrifice housing in order
to pay for other expenses such as healthcare, food, and education.
Consequently, housing is often the expenditure that is dropped. With the
poverty rate at a recent all time high, it is becoming even more challenging to
maintain housing.
For instance, the 2011
Census Bureau reported that 46.2 million Americans are living below the
official poverty line. It was the highest poverty rate in 52 years. Everyday America’s
poorest citizens are on the verge of homelessness. Housing is something that a
person should have access to regardless of one’s socioeconomic condition.
