Assuming that in The long term individuals get below market rate housing presumes that A) individuals will eventually be able to afford home ownership B) the local economy is stable enough for them to purchase a house C) interest rates/principal are low enough at the time of purchase for this to be worth the opportunity cost D) Once I purchase a home, I needn’t move or purchase another at market rates.
In the post war years the above conditions held for decades leading to relatively steady home ownership rates and ages of first home ownership. However due to the rapidly rising cost of housing since the late 80s home ownership is rapidly changing.
Millennials have famously deferred home ownership, while gen z is starting to believe its is simply impossible to acquire. 22%[1] of all housing sales now go to private equity firms.
Unlike the stats collection used by the Fed of asking private home owners what they would rent their house for - rental rates are now often the subject of collusion through pricing algorithms[2]. Finally, individuals rarely own a single house forever - this would reduce economic mobility and be problematic in and of itself. When a home owner purchases a new home, they are subject to market pricing.
In the post war years the above conditions held for decades leading to relatively steady home ownership rates and ages of first home ownership. However due to the rapidly rising cost of housing since the late 80s home ownership is rapidly changing.
Millennials have famously deferred home ownership, while gen z is starting to believe its is simply impossible to acquire. 22%[1] of all housing sales now go to private equity firms.
Unlike the stats collection used by the Fed of asking private home owners what they would rent their house for - rental rates are now often the subject of collusion through pricing algorithms[2]. Finally, individuals rarely own a single house forever - this would reduce economic mobility and be problematic in and of itself. When a home owner purchases a new home, they are subject to market pricing.
1. https://www.dwell.com/amp/article/ban-private-equity-single-...
2. https://www.businessinsider.com/real-estate-apartment-rent-p...