Richard Mize: Did housing crash spook Millenials?

by Richard Mize Published: June 21, 2014

— Someone finally said it, sort of: The idea of owning a home — as American as the flag and apple pie — may have been tarnished for good by the housing crash.

We should all hope not.

“The housing market appears to be in recovery mode, though at a meandering pace,” said Hugh F. Kelly, Ph.D, chairman of The Counselors of Real Estate, based in Chicago, and clinical professor of real estate at New York University’s Schack Institute of Real Estate.

Yes, yes, go on.

“One cannot help but wonder whether this recovery actually has legs — and, if it doesn’t, whether the dream of home ownership has been postponed or permanently altered in the mindsets of households throughout America and other parts of the world,” Kelly said here, sort of, at the annual meeting of the National Association of Real Estate Editors.

Sort of — because he didn’t actually say it. It was in material he handed out at the meeting on the organization’s 2014 Top Ten Issues Affecting Real Estate. Housing was No. 8.

Kelly is not the only one saying it, surely, sort of or not. I’ve been wondering myself, as we watch housing, on the national level, sputter and try to get back up to speed — let alone the altitudes it enjoyed before the crash seven years ago.

Maybe he didn’t want to come out and say it. Who would want to? Maybe he just wanted to say it, sort of.

No one wants to hear it, probably not even apartment developers. A given apartment project has a shelf life for the developer — until it’s sold. Home ownership drove the whole economy for decades, and it still is a huge factor.

No one wants to see the dream fade and, actually, it’s hard to tell whether it is.

Yes, mortgage rates are still — still! — at historic lows, yet home sales are not where even smart people figured they’d be by now.

Home construction is still stumbling, too. If you haven’t noticed, there is an apartment building boom on. Thank you, tightened mortgage lending standards, and thank you, sluggish jobs recovery.

The home ownership rate in this country, pushed to record highs by federal policy and the housing and credit bubbles, is now at a 19-year low, at just over 65 percent; it peaked in 2005 at more than 69 percent.

By definition, as a peak followed by a crash, 69 percent was unsustainable. I can’t imagine seeing it again without the same kind of loose lending that got it there in the first place.

A lot is riding on Millennials — people born after 1980, which represent more than a quarter of the adult population.

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by Richard Mize
Real Estate Editor
Real estate editor Richard Mize has edited The Oklahoman's weekly residential real estate section and covered housing, commercial real estate, construction, development, finance and related business since 1999. From 1989 to 1999, he worked...
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