Low Homeownership Rates May Have Cost The U.S. Economy $300B Last Year

homeownership, house

Homeownership rates are nearing a 50-year low, and a recent study said these low rates are in part to blame for the country's slow economic growth.

If construction levels had reached the long-term average last year, U.S. gross domestic product would have been 1.8% higher during 2016, according to Rosen Consulting Group's research. That equals an influx of more than $300B, the Wall Street Journal reports. A growing number of Americans shifting in favor of renting is exacerbating the demand for housing construction, with recent reports showing even the wealthiest Americans increasingly prefer renting apartments and single-family homes to owning.

Within the past 10 years, roughly 1.2 million wealthy households with incomes exceeding $150k a year have become renters — from 2005 to 2015 the number of wealthy renters skyrocketed by 217%, a huge leap compared to the 82% increase in homeowners of the same income bracket.

Easing credit standards could help increase home purchases and construction activity, experts said, though regulations and labor shortages may still contrain growth. Others said lending requirements have become too strict, forcing many middle-class families to miss out on appreciation in the housing market.

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