Political deadlock mixed with terrible housing market conditions will eventually turn America into a society of renters, according to the latest Housing Market Insights report from Morgan Stanley.

High rates of mortgage delinquency, foreclosures and liquidations are turning homeowners into renters, analysts at the investment banking giant said, lowering homeownership rates and increasing demand for rentals.

And it appears even federal institutions are giving up on implicitly supporting what used to be the cornerstone of the ideal American life.

In the Treasury Department white paper on reforming the government-sponsored enterprises, a suggested change to housing policy was put forward: “The administration believes that we must continue to take the necessary steps to ensure that Americans have access to an adequate range of affordable housing options. This does not mean our goal is for all Americans to be homeowners.”

During the housing bubble, homeownership rates increased from 66% to 69%, an all-time high. Today, that number is just below 65%, according to Morgan Stanley researchers Oliver Chang, James Egan and Vishwanath Tirupattur.

The analysts expect this will decline further to 59.7%, driving multifamily vacancies down and rents up. The researchers derived this estimate by taking the number of delinquent homeowners likely to be foreclosed, and moving them into the rental category.

Nonetheless, American payroll and household formation numbers are actually on the rise.

Traditionally, this would mean that these households, with increasing capital, would naturally look to invest in a home, but getting the loan to do so is on a downward trajectory (see chart below):

The above graph will come as no surprise to those following the rental markets.

The National Multi Housing Council, a trade group representing the apartment industry, pushed for balanced housing policy in regard to renting at the group’s mid-year conference in May.

During the housing boom, it was difficult to get approvals from the government-sponsored enterprises for rental housing, but localities are reducing the barriers and restrictions that have hampered rental development to encourage the revenue and jobs new development brings. The NMHC called the trend “the new normal,” and it appears demand will continue to surge.

“The best public policies must recognize the need for diverse, affordable housing options for both renters and owners. However, home ownership remains one of the most important sources of wealth for many households,” said Sarah Duda, senior research and project associate at the Woodstock Institute, a nonprofit research firm and financial reform advocate.

After reviewing the Morgan Stanley report, Duda responded: “Keeping current homeowners in their homes should be a top priority. Preserving the opportunity for people to purchase a home, particularly while affordability in the ownership market is high, is also important. Requiring meaningful loan modifications and making mortgage credit available, safe and affordable for renters who are ready and willing to buy their first home will be most helpful at this time.”

Furthermore, a lack of credit and falling home prices continue to negatively impact the desire to own a home.

And it’s not just these factors pulling down the ability of Americans to get a mortgage.

“GSE reform, Dodd-Frank securitization rules, mortgage interest deduction reform, continued home price declines and a long workout period for distressed homes, will likely make it harder to buy an owner-occupied home,” the Morgan Stanley report states.

“As such, we believe that the U.S. will become a Rentership Society, in which the homeownership rate will keep falling, the home rentership rate will conversely rise, and the rental market will dominate the investment landscape in housing for years to come,” according to the analysts.

They made clear the interpretation of their results are not necessarily equal to a negative outlook. They point to improvement to the multifamily sector as an example. However, performance of single-family dwellings, often owned by one landlord, are more difficult to project.

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I recently read a blog article which stated approximately 2/3rds of all “robberies” occur in the form of  scams — everything from fake charities to “not-quite-what-you-expected” Internet purchases.

Sounds like an urban myth to me, but in this day and age, who knows?  Which is why the article below is worth reading.  It is a verifiable scam, one which occurs regularly all over the world.  Losses in our single industry are potentially astronomic!

This writer lost $565.00 in a single transaction. Read on to find out how and why… Then realize the next time, it could be you.

I was stressed, rushing to make last-minute lodging arrangements for a three-stop writing trip to Europe, when it appeared on Craigslist: the perfect apartment for my first stop in London. A tiny studio in Notting Hill for just £45, or $73, a night.

I hadn’t been in London since I was a boy, so I shot the link around to some friends to ask about the location. Great neighborhood, they said. Take it.

via Burned! A London Vacation Rental Scam – NYTimes.com.

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Before beginning the search for a new apartment, a potential renter should take a little time to prepare themselves for this exciting beginning.

via Apartment Rental Tips And Tricks.

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via Skilled Apartment Agents: What Are They And In What Way Do They Assist? « UK Prestige Blog Arena.

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For more information on this listing click here

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Most investors want to sell properties outright. They hope for a clean, quick transaction. But for many, it’s just not happening.

Rent-to-own sales, or lease options, are moving into the mainstream, according to Robert Eisenstein with Home Run Homes, an online classifieds website dedicated solely to rent to own transactions.

via Landlord Help | American Apartment Owners Association.

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Do you actually need to purchase a renters insurance policy? After all, your property’s owner has insurance already, doesn’t he? Discover the facts about renters insurance coverage that you should know that can shield your monetary assets and investments.

via Is Apartment Renters Insurance Important to Purchase? | Article Directory Project.

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In one case the lease required tenants to sign a non-smoking addendum. When the current tenant complained to the landlord that the new tenant that had recently moved in downstairs was a heavy smoker the Landlord requested she prove it with pictures and 2 witnesses! The tenant had resided in the building for over 3 years and felt it wasn’t her responsibility to enforce the owner’s lease and is moving out.

The smoking issue has really become a “hot button” for many of the tenants and owners we deal with. Most of our private Landlords request non-smoking tenants and it is well received by most of our customers. I don’t doubt similar laws like those in Buffalo & other cities will be in place nationally soon.  

I have pasted the link to the article here.

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Many people live a lifestyle that is above and beyond their means. Knowing where your money is going is the first step in lowering your living expenses.

via Changing Your Lifestyle to Lower Living Expenses | Oh My Apartment.

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