With the housing crisis still taking its toll, the nation’s homeownership rate slipped further during the first three months of this year.
The U.S. Census Bureau reported Wednesday that the homeownership rate dropped to 66.4 percent at the end of the first quarter. It’s fallen back to a level not seen since 1998. Analysis of the numbers shows that the housing bust has more than reversed the increase in homeownership gained during the boom.
Economists at the research firm Capital Economics say the further decline in the homeownership rate in the first quarter “provides yet more evidence that Americans are now less able and less willing to buy a home.”
Paul Dales, the firm’s senior U.S. economist, said, “Part of this fall is due to foreclosures and the combination of high unemployment and tighter credit conditions preventing households from getting on the property ladder.”
But, Dales added, “[I]t also seems likely that there has been a reduction in the desire to own a home now it’s clear that housing is not a one way bet.”
At the same time, the homeowner vacancy rate fell to 2.6 percent from 2.7 percent, but Dales says this figures till remains above the long-run trend, suggesting that there is still too much supply.
Two million of the homes up for sale were sitting empty during the first quarter and another 4 million empty properties were not even listed, he explained.
“The inevitable consequence of low demand and high supply is lower prices,” Dales said.