When it comes to both the government and the Federal Reserve, trusting any program to either of these agencies is a sure fire way to destroy an industry. And just as former Fed Chairman Alan Greenspan helped create the housing bubble that burst confidence in home ownership, the latter two central bank heads have finally killed it entirely.
On July 27, the U.S. Census issued its most recent home ownership data, with the results showing that Americans owning a primary residence are now down to the point where ownership is at levels not seen in nearly 50 years.
Earlier today, the US Census released its latest homeownership data, which confirmed that for what is left of America’s middle class, owning a home has become virtually impossible, with the homeownership rate plunging from the lowest level since 1986, or 63.7%, to just 63.4% the lowest reading since the first quarter of 1967.
Three months ago, when compiling this data we said that “at this rate, by the end of the 2015 and certainly by the end of Obama’s second term, the US homeownership rate will drop to the lowest in modern US history.” That moment, as shown on the chart below, came far sooner than ever we had expected. The only question is whether the lowest homeownership print on record reported in 1965 and standing at 62.9% will be taken out in the next 2 quarters or in early 2016. – Zerohedge
The ideology of making home ownership the cornerstone of the American Dream came out of World War II when the government sought to aid the economy through new Veteran’s benefit programs such as the G.I. Bill and V.A. Loans. 40 years later, President Clinton expanded upon this in an attempt to allow minorities and the poor to join in this ‘dream’ by subsidizing home buying through the Housing and Urban Development in 1994. And ironically, 1994 was when Greenspan began his policies of cheap money and lower interest rates that led to the Dot Com bubble, and immediately after, the Housing Bubble.
When markets are manipulated through artificial stimulus, and not through natural economic laws, the consequences are always collapse. And just as a recession naturally follows artificial boom times in the market cycle, the results of years of pushing people who couldn’t afford to buy a home with cheap money have now been erased, with little to show for it but trillions of dollars of un-payable debt.
Kenneth Schortgen Jr is a writer for Secretsofthefed.com, Examiner.com, Roguemoney.net, and To the Death Media, and hosts the popular web blog, The Daily Economist. Ken can also be heard Wednesday afternoons giving an weekly economic report on the Angel Clark radio show.