home ownership, renting, double dip, good for whom?

[Rich Weese]

My day started with getting ready for a trip tomorrow to Cancun. Fun, excitement and grand kids.... Then, I made the mistake of reading news reports and picking up the USA Today.
Front Page headline article "Cities see rise in rental homes". Shouldn't have read it. Opening paragraph states that over 500 large and mid size cities have seen homeownership drop and increase in renters. Good or bad?
The 4 million foreclosed homes in last 5 years will cause long lasting changes, reduction in neighborhood stability, and eliminate the # 1 method folks have created wealth over the last 50 years-their home equity.

Irvine increased from 40-50% renters in last 10 years
25 cities now have more renters than owners
Since 206,rental households have grown 692,000 a year
Since 2006, owner-homes have dropped 201,000 a year.

Then I read some more articles that talk about a DOUBLE DIGIT drop (11.6%) in RE values currently.

Then I read some more articles that seem to say the dream of home ownership might not be so good any more. Concern about more drops in values. Continued foreclosures. Potential cuts to home owner subsidies. Possible elimination of interest deduction on taxes.

It seems to me, when I start to think deeply about this, maybe there is a move afoot to turn U.S into renters. Who does this benefit? Why would someone not want to be positive about real estate ownership. Isn't this where the majority of estates have been created? What if we can't see benefit in owning real estate? What does that do to values? Why would lenders want to loan on a bad future?

There is definitely a positive in renting currently. In many cities you can rent the same home than what you would pay in mortgage pmts. If you didn't believe in value increases, or were constantly being told that is no longer the best route, why would you do it? Even with the low interest rates, govt assistance programs, mortgage re-dos etc, the prognosis is not good. We've been told we're on the mend, yet the facts tell a different story.

Why would govt want this? Could it be beneficial to them? Take away that dream and create more dependence on Big Brother? Higher inflation wouldn't matter as much or would it? Would this help create a more "level playing field for all" if the # 1 wealth creator was taken away? Would this be helpful? Would this lead to more "socialistic" approach and need of Big Brother involvement?
I told you this messed up my day!! I don't have the answers. The increased demand for renters is good for my rentals, but if the buying public doesn't believe owning real estate is a good thing, aren't we screwed? Feel free to disagree or tell me I'm nuts. In this instance, I hope I am. Rich