By: John P. Napolitano, CFP®, CPA, PFS, MST

The U. S. Census Bureau recently released a report showing that the percentage of Americans who own a home has dropped to the lowest levels that we’ve seen in 50 years. There are a few solid reasons for this. 

The first reason is mortgage underwriting. Since the financial crisis, mortgage underwriting has become much stricter. Buyers are required to provide greater documentation, come up with larger down payments and everything from your bank balances through your employment are verified many times up and until the actual hour of your closing.

A second reason is the sting of the financial crisis itself. Those young Americans who were early adopters at home buying in the years before the financial crisis may still be underwater. I’ve seen many homes around the country that are still not selling for what they sold for in 2004.

These younger buyers also graduated from college with a few unexpected consequences. One is the mound of college debt that the average middle class person has. College loans are amongst the worst types of debts that one can accumulate. The rates are usuriously high and these debts are not dischargeable in a bankruptcy filing. I understand that the bankruptcy provision is designed to prevent abuse but it is equally unfair to the student who decides on a lower paying career or becomes disabled and unable to earn what is required to service that college debt. Qualifying for a mortgage with mounds of college debt is that much harder.

The second surprise for these graduates was their inability to find suitable professional employment.  Many went back to their part time or summer jobs as a way to earn something. Many others, however, went on to law school or for a graduate degree, worsening their already troublesome level of student loans.

Based on the current real estate boom being experienced by many areas in the US, it doesn’t appear that this lower home ownership percentage has hurt real estate values as they are strong and appreciating in many areas. How could prices be strong or appreciating with fewer buyers in the marketplace?

That answer lies in a few places. Low interest rates and foreign buyers. With mortgage rates around the 3% level, the rising cost of ownership from price appreciation is somewhat muted. It doesn’t feel like you’re paying so much because of the relatively low payments caused by low interest rates.

As low as rates are here in the USA, rates are even lower in many developed foreign economies. Savers in Germany, for example, are receiving negative rates for their 10 year investment in German sovereign debt. The U. S. currency has also been very strong, causing these foreign investors to look at the USA as a safe haven for their investments.

Going forward things will change. I can’t say when, but the day for those who ultimately plan to own will arrive before the rates rise and foreign investors decide to pack up their bags and head back home.


John P. Napolitano CFP®, CPA is CEO of U. S. Wealth Management in Braintree, MA. Visit JohnPNapolitano on LinkedIn or The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. John Napolitano is a registered principal with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through US Financial Advisors, a Registered Investment Advisor. US Financial Advisors and US Wealth Management are separate entities from LPL Financial. He can be reached at 781-849-9200.