The U.S. rate of home ownership has dropped by the greatest amount in over 20 years and now stands at 67.6% as of September, 2009. And in another interesting development, over a million homeowners who owe way more than their house is worth are choosing to go into what is being called “strategic default” in 2009. This means they’re either just walking away from their home and mortgage, or waiting until the bank forecloses on them. Data provider LPS Applied Analytics estimates this has freed up about $5 billion in extra cash flow a month.
The strategic default rate in Colorado has risen from 4.98% in the fourth quarter of 2004 to 16.11% for the entire year of 2008. Compare this to California where the 2008 rate climbed to 31.39%.
Many of these famlies have concluded that owning their own home is a sucker’s game, and are finding that rental prices are making a rental home their best choice. What do you suppose this trend is going to have on apartment vacany rates?
Read the complete article from the Wall Street Journal.
Related articles about home foreclosures:
- Another wave of Phoenix-area foreclosures forseen (seattletimes.nwsource.com)
- Is Your Family Facing Foreclosure? (abcnews.go.com)
- The New American Dream Home? A Rental (paul.kedrosky.com)