Why Renters Rule U.S. Housing Market (Part 1): A. Gary Shilling - Bloomberg.
Excerpt:
"-- Rent-Free Renters: Since 2006, 3.1 million people are essentially living rent-free by not paying their monthly mortgage payments. Assuming a monthly mortgage bill equivalent to the national average of $1,721 per person, these nonpayers have increased their purchasing power for other items by $65 billion at annual rates, or the equivalent of 5.6 percent of after-tax income.
Excerpt:
"-- Rent-Free Renters: Since 2006, 3.1 million people are essentially living rent-free by not paying their monthly mortgage payments. Assuming a monthly mortgage bill equivalent to the national average of $1,721 per person, these nonpayers have increased their purchasing power for other items by $65 billion at annual rates, or the equivalent of 5.6 percent of after-tax income.
That is a big number, but then 12.5 percent of residential mortgages are past due or in foreclosure. This may be an important reason that consumer spending has held up as well as it has in this recovery, despite all the pressure to increase the saving rate and reduce debt. Nevertheless, as heavy foreclosures resume and ex-homeowners are forced to pay rent, this free money will evaporate."
I didn't know that the average was that high.
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