U.S. home ownership rates falling as foreclosure crisis deepens
U.S. home ownership levels have declined to the lowest level in more than a decade. The trend has accelerated in recent years because of high unemployment, a foreclosure crisis and falling home values. Millions of Americans have lost their homes in the last five years and millions more are expected to in the near future.
Home ownership declining steadily
Home ownership in the U.S. has declined steadily over the last five years according to a report from the U.S. Census Bureau. U.S. home ownership has dropped by 3 million households since 2005. In the third quarter this year the rate of home ownership was 66.9 percent — the lowest rate since 1999. The home ownership rate peaked in the first quarter of 2005 at 69.1 percent. The economic uncertainty of the past several years hit younger homeowners the most. In the third quarter 39.2 percent of people younger than 35 owned homes, a decline of 9 percent since 2005.
Housing market repercussions
As homeownership falls, the housing market follows. U.S. existing home sales in September dropped 19 percent from the year before. The current annual rate of 307,000 existing home sales is a historic low. The lack of sales continues to drive down home prices. The Census Bureau reports that 18.8 million homes are vacant. Housing starts in 2010 are at about a 600,000 a year annual rate, far below what is considered normal. A real estate analyst told CNN that fewer people are forming new households or renting. Families are doubling up and younger people are living with more roommates.
Home ownership and the foreclosure crisis
Nearly a million homes are expected to be foreclosed on in 2010. If the unemployment rate doesn’t go down, analysts have said foreclosure numbers will be even higher in 2011. A Morgan Stanley report said that about 3.1 million mortgage holders are seriously delinquent, and many are expected to lose their homes. An additional 4 million homeowners are falling behind, and half of those are expected to go into foreclosure. The total number of homes in danger of foreclosure is about 11 million.