People are Still Renting Years after the Real Estate Crash

Real estate trends show that homeownership is still on an uphill climb while rentals are skyrocketing even after almost a decade since the crash.

The American Community Survey has released data on homeownership rate which fell to 63.1 percent in 2014 from 63.5 percent in 2013. Jed Kolko, a senior fellow at the Terner Center for Housing Innovation at the University of California in Berkeley prepared the data. The highest level homeownership rate reached was in 2006 when it peaked at 67.3 percent, but it has been on a downward trend since then, according to Realtor.com. Kolko said the census data "shows us ways in which the housing market is recovering very slowly."

But according to the Realtor.com, the most unexpected detail the report analysis showed is that single-family renting is still gaining popularity. It was surprising due to the fact that it was looked upon by many as temporary and only families affected by foreclosures were expected to apply it as a solution. From 2013 to 2014 the number of households that availed of single family rentals increased by 2.1 percent as compared to 1.8 percent for multifamily rentals.

Meanwhile in Newsweek, a report says that about 15 million U.S. households will spend a big chunk of their income, as much as half, on rent by 2025. It is seen as a significant increase from this year's 11.8 million households that spend more than 50 percent of their earnings on rentals. The study was done by Joint Center for Housing Studies of Harvard University in partnership with Enterprise Community Partners Inc.

Andrew Jakabovics, senior director for policy development and research at Enterprise said that rent is only "affordable" when it consumes only about 30 percent of one's earnings. With many families opting to rent instead of owning homes, this rapid rise in rental price will sure pose a big problem in the not so distant future.