02/19/2007

Home ownership in US falls

The Q409 homeownership rate dipped in Q409, bringing the rate of homeowners at its lowest point since the second quarter of the year 2000, according to Census Bureau data.

The Q409 rate of 67.2% is down slightly from Q309’s rate of 67.6%, and is also down from Q408, when the homeownership rate was 67.5%.

Seasonally adjusted, the Q409 rate was 67.3%, down from the seasonally adjusted rate of 67.4% in Q309 and 67.6% in Q408. The seasonally adjusted homeownership rate is also at its lowest level since Q200.

Regionally, The biggest drop was in the South, where the rate declined to 69.1% from 69.7% in Q309 and 69.8% in Q408. The West declined to 62.3% from 62.7% in both Q309 and Q408. Homeownership in the Midwest decreased to 71.3% from 71.6% in Q309 and 71.4% in Q408. In the Northeast, homeownership declined to 63.9% from 64% in both Q309 and Q408.

The homeownership rate for young households — homeowners under 35 — took a greater share, while all other age groups declined. Michael Fratantoni, vice president of research and economics at the Mortgage Bankers Association (MBA) attributed this to the homebuyer tax credit. Rates also fell across all income levels.

Rental vacancy decreased to 10.7% from 11.1% in Q309, while the homeowner vacancy rate increased to 2.7% in Q409 from 2.6% in Q309.

The total number of vacant housing units increased by 100,000 over the year, driven by an increase in vacant rental units, Fratantoni wrote. In the past year, there’s been an increase of more than 1m occupied housing units, which Fratantoni said was due to an increase in rental house occupancy, which was up by 700,000 units during the year, compared to an increase of 300,000 occupied owned units. Vacant properties for sale decreased over the year by 119,000 units, while there was an increase of 379,000 properties that were vacant and for rent.

Source: Housing wire

P4P Comment

Home ownership down. Rentals up. A not surprising situation given the high levels of foreclosures over the past two years, as those who have lost their homes look to rent.

Those with capital stand to profit as they can take over the foreclosed American properties at prices well below any reasonable market price, let for income, then sell later for a profit. Possibly to those renting the property as it’s quite common in USA for those renting a house to raise finance when they can to buy the property.