Buy and hold is dead. We “rent” stocks. We “rent” bonds. We “rent” commodities, and now we “rent” homes.
There are the obvious, negative reasons that homeownership is not increasing. Not enough jobs, loan availability is still difficult, a separation between where you can afford to live and where you are willing to live, etc.
Some of the other reasons, while possibly rooted in negativity are just different.
People have realized that buying and selling homes costs money. Not just the brokerage fees (how they get 6% is beyond me) but all the little work that has to be done to mold the home into what you want. This isn’t new it is just something we seemed to forget during the heyday of the housing bubble.
People don’t want to spend the money and with so much uncertainty, particularly surrounding jobs, people don’t want to be locked into one place. The idea of “establishing oneself” in a neighborhood has lost its appeal. Flexibility to adapt to economic situations has increased its appeal. Spending weekends doing something you enjoy, rather than convincing yourself that remodeling the kitchen is something you enjoy has taken over.
I have no clue what any of this means for the housing data, but I think it means that looking at traditional measures won’t provide the right answer.
The investors who were ahead of the housing bust weren’t so much looking at new sales, but had dug out these “delinquency” reports from somewhere. These were the down and dirty reports that were signaling the problems in housing, but at first many didn’t focus on them, because they weren’t part of the “core” data.
I don’t know what data that I should be looking at to see what is really going on with housing, but I am pretty sure that if the nature of the market has changed looking at the same old data is unlikely to pick up the real strength or weakness in the market.
While thinking about the right way to look at housing, back to a market which looks like it is doing its best to bore us to death, or force us to enjoy vacation.