One of the most useful strategies for rebuilding financial strength and savings in households is the choice to avoid or pay down debt while renting and taking public transit. Turn key rentals and a bus pass are increasingly being chosen over a mortgage, property upkeep and a car loan/lease. Perhaps forced by necessity, but this is a rational, secular shift in both younger and older under-saved people who are facing the realities of income stagnation and over-priced housing costs.
A behavioral change to more frugal habits and less spending is part of the critical rebuilding of household wealth which is so needed for future stability. It also means less demand and sales today. Now that ‘financial engineering’ gimmicks have run their reckless course, it is time for self-discipline, and fiscal restraint to come back into vogue. What is good for people and families will be bad for financial firms and companies banking on levered sales. But then they had their glory days getting the world into the present mess. Payback time is long overdue.
U.S. home ownership is at its lowest level since the start of 1995. Here is a direct video link.