Sujei A. Rodriguez
Introduction to Logic
The U.S. homeownership rate fell to the lowest level in 15 years in the first quarter of 2012, as borrowers lost homes to foreclosure and tighter inventory and credit kept buyers off the market. (Gittelsohn, 2012). The Census Bureau reported a rate dropped to 65.4 percent from 66 percent in the fourth quarter of 2011. According to the Census Bureau in June 2004 there was a record of 69.2 rates for homeownership. In 1960 the average age of a first-time homeowner was 24-25, according to David Berson in the journal Business Economics (Edwards, 2011). Now, the ages at which people purchase homes are higher. The average age for homeowners was 34, according to the most recent American Housing Survey data collected in 2009 (Edwards, 2011). There has been a trend toward renting among the younger generation. A study by the John Burns Real Estate Consulting firm predicts the homeownership rate for people between 25 to 34-years-olds will continue decreasing though 2015 (Walsh, 2012). According to this study the number of first-time home buyers has dropped 20 percent since 2009.
There is a variety of reasons why young people are not buying homes anymore. People aged 25 to 34 is averaging 8.2 percent unemployment rate (Walsh, 2012). This generation is also getting higher-than-ever student loan debt and low wages. Many young people, who have a decent job, are trying to pay down debt instead of getting more. Federal student loans have bloated 360 percent since the beginning of the recession, with the average student debt held by someone who graduate in 2010 at $25, 250 (Walsh, 2012). Homes prices are still relative high to pay. The interest for mortgages are as low as 3.87 percent (reported in February 2012), the lowest levels in the last four decades, but due to the countless loans default in 2000s it made the banks stricter and increased the...