US home-ownership hits 15-year low

The American dream of owning a home is at its lowest point in 15 years. Photo / Thinkstock
The American dream of owning a home is at its lowest point in 15 years. Photo / Thinkstock

The American dream of owning a home is at its lowest point in 15 years, the latest evidence of a housing market still far from recovery five years after the housing crash.

Figures released on Monday by the Census Bureau show the rate of US home ownership fell in the first three months of the year to 65.4 per cent. That's down from 66.4 per cent in the first quarter last year.

The last time the rate hit 65.4 per cent was in the first quarter of 1997. The rate peaked at 69.2 per cent in the fourth quarter of 2004, during the high-flying days of the housing boom.

Recent housing and economic data have been encouraging, prompting some economists to predict an improvement in housing this year. But few believe the US will ever return to its mid-decade peak.

January and February made up the best winter in five years for US sales of previously occupied homes, although sales fell in March. Still, a report last week tracking the number of signed contracts to buy a home rose to its highest level in nearly two years in March.

That could point to improved sales over the next two months.

Still, a backlog of foreclosures is expected to come on the market this year, weighing on home prices.

Banks are stepping up foreclosures in about half the states after slowing sharply last year while five of the biggest mortgage lenders resolved foreclosure-abuse claims.

Many potential homebuyers are still holding off from purchasing a home. Despite recent job gains, unemployment remains high. Many buyers can't qualify for loans, and lenders are requiring higher credit scores and larger down payments.

And some who can qualify are hesitant to buy because they worry home prices will keep falling.

On a regional basis, the Northeast, Midwest, South and West all posted lower ownership rates in the first quarter than a year earlier. The Midwest had the highest ownership rate at 69.5 per cent, while the West had the lowest at 59.9 per cent.

Americans 65 years or older accounted for the highest rate of ownership during the quarter at 80.9 per cent. That's stayed pretty much the same going back to 2006.

Those under 35 represented the smallest group, with an ownership rate of 36.8 per cent. That's down from 37.9 per cent a year ago.

The census also sliced the latest ownership figures by race.

Non-Hispanic, white Americans had a 73.5 per cent rate of ownership, down from 74.1 per cent in the prior-year quarter. Blacks had a 43.1 per cent rate, down from 44.8 a year ago.

The rate for Hispanics was 46.3 per cent, down from 46.8 per cent.

It's probably not surprising that households with incomes equal to or greater than the national median family income had a higher ownership rate (80.3 per cent) than those who earned below the median (50.4 per cent). But both sides of the income divide saw their ownership rate decline.

While ownership is down, fewer homes and rental properties are empty.

The first-quarter figures show national vacancy rates for rental housing slipped to 8.8 per cent, down from 9.7 per cent a year earlier. Vacancy rates among homeowners fell to 2.2 per cent from 2.6 per cent.

- AAP

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