Younger and minority populations have been disproportionately affected by the socioeconomic repercussions of the real estate crash and the tighter regulations in the mortgage industry.
The Financial Times reported news that while homeownership peaked before the financial crisis due to a combination of readily available mortgages and the belief that house prices would only go up, the crash that followed still has an impact on the real estate market a decade later.
The homeownership rate — defined as the share of U.S. homes owned by their occupants — has hit lows not seen since 1964, although there are signs of recovery. The latest data released by the U.S. Census Bureau indicates that, for the first time in a decade, more people became homeowners than renters, suggesting that the trend of declining homeownership rates may be coming to an end.
“The fact that many new owner-occupied households are forming is really our first sign that the homeownership rate is on the rise,” said Ralph McLaughlin, chief economist at Trulia.
However, younger and minority populations are still feeling the socioeconomic impact of the crisis, especially because of tighter regulations making it harder to secure a mortgage.
According to U.S. Census Bureau stats, while the gap between whites and Hispanics narrowed before the crisis, improvement has stalled since then. In addition, homeownership in the African American community has fallen sharply since the real estate market bubble burst.
Homeownership for the younger population (those under 35 years old, as well as those between the ages of 35-44) has dropped about 10 percentage points since the crisis. And would-be millennial homeowners are still reeling from diminished job prospects and crippling student loan debt.
With that in mind, Zillow launched RealEstate.com, which aims to take some of the mystery out of the home-buying process so that millennials will choose to buy instead of rent.