Feb 16, 2017|
Mark Fleming (First American Financial Corporation, Home Ownership) by The Financial Exchange
Transcript - Not for consumer use. Robot overlords only. Will not be accurate.
The percentage of Americans that own their own home has been declining dramatically. Since the year 2004. And one could argue too high in 2004. We're joined now by mark Fleming from the first American financial corporation he joins us to talk about the declining rate of homeownership and mark are you. Very good so what do the peak was back in 2004 and it was what 69% of Americans own their own home. Patrick 69% in what is it today. Harvard just around 64 a little bit below about 5% decline art. Quit when you looked at the you know a longer period of time wait what was the homeownership rates they over. Back in the sixty users 70s80s. I'm wondering if 2004 was a little bit of an anomaly. Right. Yeah I love the headlines we've been reading in the over the last year sort of I mean from statistical offense it's true that the homeownership rate is probably half century lows that they bank. But the trick is throughout the 1990s up until about 1995. The homeownership rate pretty consistently hovered around. 65%. For the long run average anywhere else since 1950s and sixties has been. In the mid sixties so. While technically that number today is that fifty year lows in mind the amount of variation in the homeownership rate. Fifty year low with only 5% off. 69% high and and to your point. Easily probably one or 2% of that 69. Words let's be kind of call it due to financial innovation in helping them. There so 63 point 7%. That is lower than the the fifty year average. Would what has happened you point out to a statistic related to marriage rates what are marriage rates today vs 1960. Right you have to you know homeownership it is is that decision that's in large part driven by lifestyle choices and we look at. Getting married and that decision to have children have strong. Drivers. The desire to be a homeowners you're not married don't have to do much more likely to be. A renter in the state delivering the actual like stopped example. And so marriage rate has declined. In recent years. In large part because of that the shifting demographics. You know he's had baby boomers. You know they came to before in the sixties and seventies and and and you drove homeownership been terrible desire to be homeowners that they got married and had kids and had. Generation next striving homeownership is they got married and had kids in the 1990s. And early 2000. Now you have millennial which is actually a larger group that baby boomers. And they're not getting married and not having kids at least. At this fit with the same timing all at the same age as prior generations and so. We estimate that you know all upheld equal or trying to figure out what they're breaking down the changes in the homeownership rates that about. The homeownership rate should go down like three and a half percent simply because. Millennial aren't getting married or the overall marriage rate is as high data used to be and that's really democratic storing more than anything else. What I wanna point out the number back in 1960. With 72%. Wright married households today it's 50% that is a dramatic change. In a fifty year period of time 57 year period of time. That's right and here's one good reason why we don't need to be too worried about that fact that you get about all of those households that are out there today that are unmarried. President. Drawing down not overall marriage may rate. They're all these young families there are young households there's no regulation individuals who is he going to college in getting college degrees. There are going to be the most highly educated. Generation in American history and yes you delay getting married if you're busy getting a master's degree. Rate in birth rates are declining as well ranked. Date same thing right about of course that's generally good decent got together you have your EP IT spiel about is almost certainly. First to date. And you make and he married yeah. Right now now it might be date. Made. Have kids that marry or who knows right right it doesn't being spilled sort of happened enough that actually progressed through with our like agents. You know it's hard to find I was looking for birth of the number of births in 2016 chuck I I had no luck finding EET I got it. EDF 2016 burst how many. Not pretty sixteen I think that they have the data because of where comes in the latest list when he hit that comes out in June I think usually the yeah the year four million. In that ballpark. You know we I look at it as a rate that that the two good way to look at is the rate. Of births per thousand women and where the women her age fifteen to forty force that like basically primed bursting age right. And when you look back historically when it went well the standard for the UK in 1960 dot birth rate was 24. Per 1000 yeah. I'm it dropped. Into the status he's actually quite dramatically between 1960 and the early seventies he dropped from 24 down to under fifteen there's a big big. Klein. In the sixty news and I'll leave that for their listeners to consider. And that is that of risk wrote back up that they basically flat line until 1990 at around sixteen yeah. And has come down now to below. Low fourteen. Then what is it 12912. Point eight and then. Gatti and and I don't know. I I have a sneaking suspicion we're gonna learn that there were a lot of births in 2016 but I can't back it up with any stats. Read our I think the year making the point that I still also try to chip stress which is. If we get less time as millennial date we make an increase this year married households. With children and their four homeownership will rebound because of that it's that. We don't from all the surveys we don't see. That and now. The millennial generation fundamentally different from prior generations in that they don't want to ever be Americans don't want to ever have children. It's just these decisions are made. I'm in their thirties rather than for baby boomers their early twenty's for Generation X. their late twenty's. Great researcher mark and I appreciate your time thanks for joining us today. Mark Fleming he's from the first American financial corporation and it does point out of this thing that shocked me the most that are about you but you know the birth rate we all knew that. I had no idea. That marriage rates have dropped from 72%. In 1960. Under 50% today you can make the case that marriage or it was two like to. Again based on the divorce that that we've seen OK you know you know immediately you could make the case that a lot of those people shouldn't have forgotten you know I guess so but it just that did that number shocking 72 to fifty. Again these half the population half the adult populations. Keep in mind also that includes people who were divorced now in with him they might have previously been married so in part that's just due to the uptick in divorce over the last thirty years while now a ID I was just very surprised. When when I saw that.