Home Ownership Rate Near
20-Year Low
The fallout from the housing crisis continues as
the number of Americans who own homes dropped to the lowest level in nearly two
decades in the second quarter, the U.S. Department of Commerce reports.
The latest report shows that 64.8 percent of U.S.
homes were owner-occupied in the second quarter, down from 65 percent in the
first quarter and marking the lowest level since the third quarter of 1995. Los
Angeles and Orange counties in California saw the lowest home ownership rate of
any metro area in the country, with owners occupying just 49.1 percent of
homes.
"The falling home ownership in recent years is
partly due to the struggles of first-time buyers," National Association of
REALTORS® chief economist Lawrence Yun writes on the Economists' Outlook blog.
"Lower wages and larger student debts among recent college
graduates have limited the Millennial generation from taking advantage of the
historically low interest rates."
The home ownership rate for people under age 35
remains historically low at 35.9 percent.
In 2004, home ownership peaked at 69.4 percent.
That number has been dropping steadily ever since.
Yun notes that there was a higher number of home
owners in the latest data than in prior months, but the number of renters grew
faster. He says that over the past three months, the number of renting
households rose by 312,000 while the number of home owners rose by
54,000.
"The strange pattern of more home owners but a
falling home ownership rate will continue for the next two years at
least," Yun notes. "That's because household formation of young
adults who had been living with their parents will seek out their own housing
with an improving economy, first as renters before making the shift to home
owners. This trend also means that
housing demand for both home purchases and rentals will be on the
increase."
Sounds like now is the time to seriously look at
buying or selling a home. Contact a Realtor at RE/MAX Lakes Area Realty today
to discuss your options and to see how YOU can be ready for the next housing
boom!
Source: “Homeownership Rate in Second
Quarter of 2014,” National Association of REALTORS® Economists’
Outlook Blog (July 30, 2014) and “U.S. Homeownership Rate Slides to
Lowest Level Since 1995,” Los Angeles Times (July 29, 2014)
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