Rise in Renters Wiping Out Gains in Homeownership

Effects of subprime crisis evident as percentage of owners drops
By Rob Quinn,  Newser Staff
Posted Jun 21, 2008 7:29 AM CDT
Signs advertising two houses for sale and one for rent compete for attention Tuesday, March 25, 2008 in Tacoma, Wash.    (AP Photo/Ted S. Warren)
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(Newser) – Americans are shifting from being homeowners to renters in rising numbers, the New York Times reports, all but wiping out gains made during the boom. The percentage of homes headed by homeowners dropped from 69.1% to 67.8% this year, which sounds modest, but is, in fact, the biggest decline in 20 years. President Bush's ambitious "ownership society" plan hoped to see more low-income and minority families own their own homes, but these groups have been hardest hit by the subprime crisis.

Many who bought houses are now worse off than before because of foreclosures. Others are having trouble making their first transition to ownership as banks clamp down on credit. "The bloom is off of homeownership,” said a former federal housing chief. “We’re seeing more dramatic growth in renters and a decline in the number of owners. People are beginning to understand that homeownership can be a very risky venture.”