Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
When it comes to the US housing market there appear to be three groups of people: those who who have either unlimited cash and/or access to credit, and like the most rabid of bubble-chasing speculators, are perfectly happy to engage in a game of Flip That House for a short-term profit pending the discovery of a greater fool (often times converting the house into rental properties as numerous hedge funds have been doing on cost-free basis courtesy of the government's REO-To-Rent program) – they are the vast minority of speculators; then there are those who currently rent and are opportunistically looking at home prices, willing to dip their toe at the right price – these too are few and far between and mostly represent a function of the natural growth of the US household offset by the availability of jobs; and then there is everyone else. Sadly, it is the "everyone else" that is the vast majority of the US population.
It is this "everyone else" that is once again being forced out of housing due to both the ramping bubble in housing prices making housing affordable primarily to those who buy with the intention of flipping, and due to the lack of available credit to those who actually need it (see sad state of commercial bank loans in the US).
Finally, it is this "everyone else" who comprises the bulk of those who have been kicked out of the American Dream, whose core pillar has always been owning your own home (with or without a massive mortgage attached), not renting.
As the US Census Bureau reported earlier today, the US homeownership rates in the first quarter of 2013 dropped by another 0.4% to a fresh 18 years low, or 65% – the lowest since 1995!
That this progressive, ongoing decline in ownership is taking place despite allegedly record home affordability is without doubt the most troubling feature of the economic "recovery" which has forced ever more Americans to shift away from owning and into renting, as can be seen by the next two charts showing the median asking rent and sale prices for vacant rent units and for sale units. While home prices have a long way to go still countrywide (excluding the occasional regional bubble market such as LA and NY), rents are already at record highs, which explains why it is every hedge fund's dream to become a landlord.
However, it is only a matter of time before zero-cost subsidized rental pass thru units owned by hedge funds who can therefore keep the rental asking price as high as they wish, forces out more and more Americans out of the Adjusted American Dream, where renting is the new buying, and leads to ever more people living in the streets.
Although, we are confident, it will be merely a matter of time before this, or some other administration, simply unleashes a "street living tax" – after all, "it is only fair" to apply austerity to hobos next. Because it has worked so well with the billionaires and trillionaires…
