The nation's home ownership rate, already down from a high of more than 69% at the height of the housing market to 67.1% today is poised to fall even further, according to California marketing consultant John Burns.
Despite several factors that could push the rate back up, Burns, who works for dozens of homebuilders nationwide, thinks it will drop to 61.7%. And it could fall to under 60%, he says, if a meaningful number of the 5 million owners with no equity in their properties decide to walk away from their mortgages.
On the upside, the positive factors that suggest a rebound in the ownership rate include an aging population which tends to embrace ownership in greater numbers than younger people, new household formations, greater affordability, super low mortgage rates and social policy.
But Burns says limits on immigration, tightened lending policies and the rising number of defaults by people who are already owners will have an even greater impact, serving to drive the ownership rate down.
"Now that the economy has slowed much more than expected, consumers have moved back to the sidelines - despite the fantastic interest rates and affordability," the consultant said in a recent newsletter to clients.
Among other things, he also pointed out that there are 7.4 million fewer adults with incomes large enough to buy homes. And on top of that, he noted, three out of every four of the 8 million households that are currently behind on their mortgage payments will eventually lose their homes to their lenders.
"Home ownership is clearly a value that is promoted by most politicians," Burns wrote. "They are in for a rude awakening, however, and a legacy that they will not be proud of."