The news this summer about housing seems encouraging: Prices for new and existing houses have risen smartly in most areas; foreclosures are down; job growth continues; and, at press time, mortgage rates remain historically low. What’s not to cheer about? The residential market has settled back to normal. Or has it?
“Normal” would mean the next generation—those between 25 to 34, the prime demographic for first-time home buyers—will soon grow tired of renting, and, like their parents before them, shop for a place of their own.
But what if it’s not business as usual; what if we’re seeing a new normal, as the Urban Institute did in a report issued earlier this summer? Their claim: The rate of homeownership has been falling since last decade’s housing boom and will continue to decline until at least 2030. Contrast that with the findings of the National Association of Realtors study — Millennials purchased 32 percent of all homes in the country in 2014, up from 31 percent in 2013—and you have to wonder what’s going on here. We seem to be going through a period of transition in the marketplace, where different data sets are telling different stories.
One thing is certain, though: In the United States, homeownership is an engine of community building. Having one’s own home builds social capital. It fosters interactions with others in everything from the quality of schools to engagement in the political process. If the Urban Institute is right, and what seems to be emerging is not a temporary blip but a fundamental shift in how we live, attention will have to be paid to thinking about renters not simply as consumers, but as citizens invested in the health of their communities. This will require a major shift in how our society thinks about private property, common space, infrastructure, and the rights of developers.
Left to itself, the market will not accommodate such a shift. It will likely require the leadership of architects and urban planners working with elected officials to advocate for policies that promote the investment of renters in the public realm. Without such an investment, the center of a healthy democracy will not hold.