Foreclosures are turning homeowners into renters
For many decades, homeownership has been an essential component of the “American Dream.” But now, with so many underwater mortgages, repossessions and foreclosures forcing homeowners from their homes, families in Douglasville and throughout the state and country are giving up on that particular aspiration and choosing to rent instead.
Currently, real estate analysts estimate that some 3 million former homeowners will move to rented single-family homes between 2010 and 2015. That number represents 75 percent of the homeowners who lose their houses to foreclosure or similar processes. Already, single-family home rentals are on the rise: U.S. Census Bureau data indicates that these homes were the fastest-growing area of the rental market from 2005 to 2010.
So what does this mean for families, homebuilders, schools and businesses? This new group of tenants is unlike traditional apartment renters. They are older, they often have children and they are generally more financially stable, depending on the circumstances that motivated their decision to rent.
This means that school districts are finding themselves with a constant influx of new students, and storage unit companies are flourishing as homeowners are forced to downsize. It also means that home builders are even less in demand, while the earnings of property managers, renovators and investors go up.
But does it mean that home ownership as we have long known it is over? Not necessarily. According to a recent Harris Interactive survey, 83 percent of renters want to someday own a home. A similar analysis estimates that more than two-thirds of homeowners who lose their homes to foreclosure will someday own again. But with home prices low and foreclosures high, it is unclear exactly when that will happen.
Source: USA Today, “Home rentals – the new American Dream?” Julie Schmit, June 6, 2012