The growth of cities and the challenge for affordable housing

by MPA13 Nov 2015
On the November 2, 2015 episode of the Lykken on Lending Internet radio show I host, my colleagues and I had the opportunity to interview housing finance specialists Tim Skeet and Toni Moss about the global mortgage market. In the US, we've seen a trend toward renting in the last few years. However, this isn't just happening in the States; Time and Toni confirmed that this is a global trend.

Interestingly enough, though, the cost of renting has also been rising. In addition to the general financial strain that is forcing rental prices up, there is a continual migration away from rural areas and toward cities – where rental properties are more prevalent. Therefore, the available inventory per capita is getting smaller and smaller. So, how is this conundrum going to play out?

According to Tim and Toni, we may be looking at a new norm. We may not ever bounce back to the golden age of high home ownership rates. In Germany, for example, the home ownership rate is lower than 50%. All of that being said, we are still feeling the pinch from the financial crisis and – as credit standards loosen and more people can borrow again – I can't help but be optimistic. Will it ever be as good as it once was for the mortgage industry? Perhaps not. But I do think that it's still going to get better than it is now.


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