smaller houses, antidotes to debt

Smaller houses should be a logical economic and green choice, saving buyers on their purchase prices and beyond. Yet even the nicest places are viewed as starter or vacation homes. It’s time to change.

Renting or buying:  More American homes are owned and occupied than rented. However the percentage of owner-occupied homes peaked in 2004 and has continued on a quick descent. Of course, renters are filling them.

Last year, 65.2% of U.S. homes were occupied by owners. That's a pretty rapid decline of 4.2% from the 69.4% peak in mid-2004. Interestingly, the owned and occupied rate seems on course to return to mid-1990s levels. (Pew Research)

Last year, 65.2% of U.S. homes were occupied by owners. That’s a pretty rapid decline of 4.2% from the 69.4% peak in mid-2004. Interestingly, the owned and occupied rate seems on course to return to mid-1990s levels. (Pew Research)

Everyone with cold feet:  American renters up to age 64 have shied away from jumping into the home ownership pool. From 2001 to 2011, the annual shift plummeted by nearly 43 percent.

Look at households switching from renting to owning homes over the prior year. In 2011, some 4% bought homes as compared to 7%  in 2001. While under 44 year olds drove the trend, each age group slowed ownership. (Pew Research)

Look at households switching from renting to owning homes over the prior year. In 2011, 4% bought homes as compared to 7% in 2001. While under 44 year olds drove the trend, each age group slowed ownership. (Pew Research)

College loan pressure:  Some 37 percent of young households shouldered school loans, in the latest Pew statistics.  That’s a large group of would-be home buyers, mostly sitting on the sidelines!

Households are saddled with student loans. For heads of households under 40 years old, 37% were paying or deferring their school debts in 2010, a big leap from the 22% in 2001. (Pew Research)

Households are saddled with student loans. For heads of households under 40 years old, 37% were paying or deferring their school debts in 2010, a big leap from the 22% in 2001. (Pew Research)

Income high, net worth low:  How will the under-40 year olds decide to live? For those paying school loans, assets are scarce to fund a large down payment and home. It’s not all doom and gloom, with smaller home options out there.

College-educated Americans do earn 79% more than their high-school grad counterparts. Still college grads have limited net worth due to their loans, which drive up all forms of debt. (Pew Research)

College-educated Americans do earn 79% more than their high-school grad counterparts. Still college grads have limited net worth due to their loans, which drive up all forms of debt. (Pew Research)

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