Homes Not as Affordable as in Past

 

The U.S. last possessed a homeownership rate of 66.5 percent in the fourth quarter of 1998.
Courtesy of NAHB

This decline in homeownership rate suggests caution for those analysts who believe housing price declines are correlated with improvements in affordability. Typically, low house prices are correlated with affordability. But in the recent declines, they have not proved to increase home buying because of all the other hurdles imposed by credit allocators and threats of federal government policy changes.

Overall, the Census Bureau data show a small decline in the seasonally-adjusted homeownership rate for the U.S., which fell from 66.6 percent in the fourth quarter of 2010 to 66.5 percent in the first quarter of 2011 (a change small enough to be within the Census Bureau survey’s margin of error). The homeownership rate stood at 67.2 percent in the first quarter of 2010.

With respect to the stock of vacant housing units, the rental vacancy rate for the first quarter of 2011 ticked up to 9.7 percent (from 9.4 percent in previous quarter) and is down from 10.6 percent from the first quarter of 2010. The total number of renters is up about one million on a year-over-year basis to 37.7 million.

The homeowner vacancy rate declined for the first quarter of 2011 to 2.6 percent from 2.7 percent at the end of 2010 and is unchanged on a year-over-year basis. The total number of homeowners is down approximately 300,000 from the beginning of 2010 to 74.5 million.

Since the first quarter of 2010, the number of vacant units for-sale is somewhat unchanged, but the number of vacant units for-rent is down by almost 360,000.

– Courtesy of NAHB