In 2016 the U.S. Home Ownership rate fell to its lowest level since 1960 with 62.9 percent of Americans owning their home in the second quarter of 2016. Home ownership in the States has been on a steady decline since 2005 and with un-affordability and a changing culture, these numbers are likely to continue dropping. In some countries, such as Germany, the norm is to rent instead of buy. For a long time Germans have been a nation of renters with only 41 percent of people owning their homes, and even less than this in Switzerland at 38.4 percent. So just what are the driving factors attributing to the shrinking number of home owners in the US and what does this mean for you? Here we examine the cause of this nation-wide trend.
There is an increasing gap between house price increases and wage growth meaning it is becoming less affordable to purchase property in many parts of the United States. Between 2012 and 2016 the average home price in America increased 60 percent while the average wage increased by only 1 percent. On top of this, interest rates are beginning to climb meaning the cost of borrowing money will be getting more expensive over the next few years. For those who already own a home, these conditions may be less significant but for those looking to enter the property market, it is becoming further out of reach.
There are lifestyle reasons that are making property ownership less appealing. The millennial generation doesn’t value material possessions as much as generations before them, and the home as a status symbol is losing its appeal to these younger people. Instead a lifestyle of new experiences, and travel is becoming more alluring. Millennials tend to value experiences over things and are not interested in sacrificing their lifestyle to pay an absorbent mortgage, especially because the average student debt in America is $37,172 as of 2016, and for many, the thought of a mortgage debt on top of this is unrealistic.
The workforce today is changing whereas twenty years ago a person may have stayed in one career for much of their adult life, today an adult holds an average of ten jobs before they turn forty. This shifting job culture means people are moving around more for work, and don’t have the same consistent income that many experienced decades ago.
The digitalization of the workforce is also seeing a shift in the job landscape. Fast Company conducted a survey which found that 34 percent of large organizations said half of their workforce would be working remotely by 2020. In white collar industries, this number is even higher. As people become less dependant on a fixed location for their income, the renting culture will become increasingly predominant.
Here at Stargate West we cater to people looking for rental accommodation in Tucson, Arizona. Whether students looking for student housing, military personnel, business travelers or simply individuals looking for a place to rent while living or visiting Tucson, we have luxury one, two and three bedroom apartments to meet most needs. If you’re looking for a place to stay or live while in Tucson, make sure to check us out!