Welcome To The U.S. Recovery: Young Adults Still Live At Home, Homeownership Rates Below Early 1990s Levels

The U.S. housing market continues to seek out equilibrium since the Great Recession. Once people learned of the reckless risk that's embedded in the American dream of owning a home, they shifted preferences away from the 30-year loan and into rental properties.

Homeownership rates have collapsed to 63.1 percent, down from 2004 highs of about 69 percent. As homeownership rates come full circle from the early 1990s levels, the Median Asking Price for Vacant Units has steadily rose.

The demand for renting has been so intense that one San Francisco Credit Union has introduced the Poppy Loan. This insane loan comes from Union members and offers $2 million to borrowers working in San Fran or San Mateo County. Borrowers are restricted to buying homes in only nine counties. 

Related Link: 5 Tips For Young People Buying Their First Home

Goldman Sachs' Marty Young laid out a 33-page of indicators on the U.S. housing market. What follows are the best in breed from his Wednesday note.

Homeownership rates have come full circle and are now below early 1990s levels:

Meanwhile, rental vacancy rates show demand remains strong for the available units:

The high cost of homeownership coupled with a lingering distrust of mortgages since the Great Recession has driven 18-34 years olds down in their parents basements:

Data provider CoreLogic shows Home Price Index forecasts are approaching pre-Great Recession levels as cheap money fuels housing market boom Part 2.

And sure enough, here's a chart showing the explosive growth in the median price of new and existing single-family home sales. Worry not though, the same people who assumed home prices wouldn't fall back in 2007 are saying today that the housing market is stable (astute minds would challenge view).

Luckily, 90-day delinquency rates for mortgages have been trending down since the Great Recession, but student loan delinquencies over 90-days remains elevated around 12 percent.

Regardless of the data, what matters is that the Fed's Bullard will say something crazy during market hours and asset prices will rise because Fed Chair Janet Yellen is too afraid to raise rates and now we have a world anchored on cheap money which could result in a terrible crash once more people realizes how irrational the asset price appreciation has been since the Fed started printing money in 2008.

As a reminder, here's a chart of the S&P 500 color coded for each Fed action, courtesy of Jeff Gundlach over at DoubleLine Capital.