As home prices become less affordable for many, builders are actually building homes for purchase by investors with the intent of turning them into rentals. These must be all cash buyers because mortgage lenders usually lend to the actual homeowners planning to live in the home. This option is apparently most attractive to young people, who normally might have been first time home buyers that are now priced out of the market and retired people who perhaps are actually living off the equity from the sale of their homes.
Our country needs 5 million homes to catch up with demand. The only way to get there as land becomes more scare in many areas is higher density condos; perhaps going up four or more stories. Land that is currently zoned commercial must be repurposed to allow for multi use residential development. This is the only way to bring the cost of housing down. We need more supply than demand to get lower prices. We are not anywhere near that happening just yet.
What is happening is that some people are rethinking the notion of affordable housing. It could be that homeownership in the US will go the way of other countries where renting is more common than ownership. One thing is sure, the notion of a fully amortized 30 year mortgage may turn into interest only loans to get much lower affordable payments. Things are changing.
