Us homeownership at lowest level in 19 years

Photo credit: Michael Patrick

The official statistics reveal that the rate of homeownership in the USA was 64.7 per cent in the second quarter of 2014. That figure is only slightly down on the 64.8 recorded in the first three months of the year but is 0.3 per cent down on the second quarter of 2013 and marks the third quarter-on-quarter drop in a row.

The statistics show a country that is increasingly deciding to rent property rather than buy it. Indeed, homeownership rates have not been this low in 19 years, since the second quarter of 1995.

Approximately 86.4 per cent of the housing units in the United States in the second quarter 2014 were occupied and 13.6 per cent were vacant. Owner-occupied housing units made up 55.9 per cent of total housing units, while renter-occupied units made up 30.5 percent of the inventory in the second quarter 2014. Vacant year-round units comprised 10.2 percent of total housing units, while 3.4 per cent were for seasonal use.

Approximately 2.5 per cent of the total units were for rent, 1.1 per cent were for sale only, and 0.8 percent were rented or sold but not yet occupied. Vacant units that were held off market comprised 5.8 per cent of the total housing stock.

The figures arrive as US house prices start to cool down following a long period of double-digit growth. Rising values and increasing mortgage rates have helped to offset improving employment and financial conditions, causing pending property sales to slip in June (according to the National Association of Realtors) as buyers are unable to afford to purchase a home.

Lawrence Yun, NAR chief economist, says the housing market is stabilizing, but ongoing challenges are impeding full sales potential. "Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates."

"The good news is that price appreciation has decreased to its slowest pace since March 2012." he adds. “With rents rising 4 percent annually, potential buyers are less likely to experience sticker shock and can make smart decisions on whether or not it makes sense to buy or continue renting."