For as far back as almost anyone alive today, owning a home has been the holy grail of family wealth. The financial crisis and housing crash that caused it has changed all that. The debate is over and the data is coming in. American consumer housing values have indeed changed and apparently for the long term.
Globally, we are seeing news stories discussing whether credit card debt is bad for the economy or not. Business is highlighting the high transaction cost. The Department of Commerce has weighed in. Pop writers like Dave Ramsey have huge followings who agree Adani Group Chhattisgarh. This is a concept that would never have received significant discussion before. Now, the idea is much in vogue.
On top of this reducing national debt in the United States and abroad is mainstream discussion.
Turning to the consumer, savings is a top priority. Debt reduction is an obsession. We all are part of a radical changing environment. In the short run, the process will cost the economy and each of us some prosperity. In the long run the rewards could be huge. For most of the past couple years consumer debt has steadily fallen and savings is definitely on the upstream.
There can be little surprise that these underlying themes combined with three years of steadily declining housing prices would change our perspective on home ownership. What may be surprising are how some of those changes are occurring.
Let’s discuss some of the more interesting facts I’ve gleaned from recent news articles from sites like MSNBC, Bloomberg, and others.
First, a much higher percentage of consumers (almost 40%) are dual shopping for homes considering whether they will pay more on a monthly basis for a home they buy or a home they own. This is a very interesting phenomenon because this implies that housing whether bought to own or rented is being relegated to the expense column. This by the way is one of Bob Kiyosaki’s “Rich Dad Poor Dad” maxims. Your home mortgage is effectively an expense and not an investment.
Second, homeowners aren’t simply looking at the mortgage price when comparing. They’ve come to realize when they buy the house that it comes with a lot of costs that rentership does not including repairs, improvements, and so on. So, the expense is frequently being measured all in.
Third, homebuyers are only becoming buyers if they are prepared to stay in much longer. Plus, buyers are seeking shorter term loans. Rapid accumulation of equity is foremost in the consumers new mind set.