Home Ownership Rate Drops to 1997-Levels
The home ownership rate took another dip in the fourth quarter of 2011, falling for the seventh year in a row as fewer Americans own their homes.
The home ownership rate now stands at 66 percent, a level that hasn’t been reached since 1997, the U.S. Census Bureau reported this week. The home ownership rate peaked at 69.2 percent in the fourth quarter of 2004, and has gradually fallen ever since.
The home ownership rate has fallen the most in the West, standing at 60 percent — a big drop compared to 64.5 percent in the fourth quarter of 2006, the Census reports.
Some people who want to own a home are being shut out of the market because they’re unable to qualify for financing for a mortgage, Paul Dales, an economist with Capital Economics, told the USA Today. Stringent loan standards have been blamed on holding back a housing recovery.
As such, more people are turning to renting. Nearly 34 percent of occupied homes in the fourth quarter were rentals, Census data shows.
“The share of Americans who are willing and able to own their own home is still falling,” analysts at Capital Economics told HousingWire. “The flipside is more households in the rented sector and fewer properties lacking tenants. This is helping to drive rents, and therefore landlords’ returns, higher.”
Source: “Home Ownership Rate Falls to 14-Year Low,” HousingWire (Jan. 31, 2012) and “Home Ownership Rate Falls to 66% as Downturn Nears a Bottom,” USA Today (Jan. 31, 2012)