CityLab's Richard Florida takes a deep dive into what he sees as a fundamental shift in home ownership, one that may one day lead to a nation of more renters than owners.
The American Dream has long been defined by homeownership, but current trends suggest this aspiration is waning. The U.S. appears to be undergoing a gradual, long-term shift from a society of mostly homeowners to more of a mix of homeowners and renters. This shift is not just about rising home prices, or a greater demand for urban living, but rather the transition from the old industrial economy to the new, highly clustered, knowledge-based one.
The national homeownership rate has plummeted over the past decade, from an all-time high of 68.8 percent in 2005 to 62.7 percent in 2015. That’s lower than the rate in 1985, when homeownership stood at 63.5 percent.
But the shift from owning to renting a home is much more dramatic in certain cities, and the most innovative and dynamic metropolitan areas consistently post the lowest homeownership rates. My Martin Prosperity Institute colleague, Karen King, and I used Census data to dig into the extent of this great housing reset across American metros from 2000 to 2015—a period that includes the economic crisis of 2008 and the subsequent recovery.