Homeownership rate drops to quarter-century low

Market Watch ^ | April 28, 2015 | By Ruth Mantell

[Oldeconomybuyer]

In the latest sign of a changing housing market, homeownership rates are at a quarter-century low, while the rental-vacancy rate is close to the slimmest proportion in more than two decades, according to government data released Tuesday.

The seasonally adjusted homeownership rate, which shows the share of occupied homes in which an owner lives, fell to 63.8% in the first quarter — the lowest proportion since the end of 1989, the U.S. Census Bureau said.

Families with income both above and below the median have seen drops in homeownership rates over the past year.

Weak income growth and difficult-to-get mortgages are likely behind homeownership drops, experts say. Home prices that are running higher aren’t helping, either. Nor are the millions of properties that are underwater — these homes are worth less than owners owe for their mortgage — with borrowers struggling to make monthly payments,

However, long-term trends show that the drop in homeownership is actually pushing the U.S. back to “normal” levels, said Sam Khater, deputy chief economist at CoreLogic, an Irvine, Calif.–based analysis firm. The market may even see further drops, he added.

[Oldeconomybuyer]

[SaxxonWoods]

This is a complicated situation with a lot of factors:

Govt policies causing market distortions in the past leading to abnormally high rates of home ownership.

Those distortions led to high foreclosure rates, taking former homeowners out of the ownership market and into the rental market where they will be stuck for years due to lowered economic mobility in the new, more socialistic America.

A construction halt after the financial crisis leading to a housing shortage now in some areas.

A significant fraction of home owners can’t sell and move up, down or sideways due to negative or low equity positions.

Due to land costs and tightened construction codes, new homes are out of range for almost all first time buyers, leading to a shortage of resale homes in some areas.

Higher mobility by young Americans today as they chase jobs around the country, leading to lower home ownership. Ownership rarely works out well unless one can stay in place for 7-10 years.

For starters...

[mac_truck]

while the rental-vacancy rate is close to the slimmest proportion in more than two decades...

What the heck does that mean...more skinny tenants?

[Flick Lives]

Your analysis of the situation covers all the bases well. It all rolls back to the “unintended consequences” of government intervention achieving the exact opposite to the goal. Much like the War on Poverty creating more poverty or student loans increasing the cost of college.

[DoughtyOne]

And he’s just getting started...

After the election, he can be more flexible.

My guess is his head goes deeper.

[dragnet2]

Takes good paying, secure full time jobs and medical benefits to go into big time mortgage debt, have families, babies, and buy all the stuff that goes along with it.

That’s not happening for millions in this America. That was for generations gone by in old America.

So there ya have it.

[DannyTN]

We could get it back if we just raised the import tariffs and made more stuff here in America.