1.2 Million Households Disappear, Putting Downward Pressure on Home Prices and Rents

[Hannah Bell]

As the Wall Street Journal explained last October:

"Driving the change is the troubled employment market, which is closely tied to rentals. With unemployment at 9.8% — a 26-year high — more would-be renters are doubling up or moving in with family and friends during periods of job loss. Landlords have been particularly battered because unemployment has been higher among workers under 35 years old, who are more likely to rent. Nationally, effective rents have fallen by 2.7% over the past year, to around $972."

So where have all these people gone who are no longer homeowners...?

It’s widely assumed that many who lose a home to foreclosure become renters. But since the recession began, there has been a five-fold increase in “overcrowding” of remaining households — defined as more than one person per room, according to the study.

Homeownership levels, meanwhile, continue to decline. New foreclosures filings are running about 300,000 a month, according to RealtyTrac. There are currently some 5 million homeowners that are 90 days or more past due on their mortgages, according to Fannie Mae chief economist Doug Duncan.

http://www.nakedcapitalism.com/2010/04/guest-post-1-2-million-households-disappear-putting-downward-pressure-on-home-prices-and-rents.html