USA: 50 year high is a new low

A ‘worrying’ new report has revealed further problems in the US housing market…

According to a new report from the US Census Bureau (USCB), 2.9 percent of U.S. homes — excluding rental properties — were vacant and up for sale first quarter of this year, compared with 2.8 percent in the fourth quarter of 2007. This signifies the highest quarterly number in records going back to 1956.

A spokesperson for the USCB, commented: “The West had the biggest gain in vacancy rates among homeowners, rising to 3.2 percent in the January-March period from 2.6 percent in the same quarter a year earlier. Vacancy rates inched up in the Northeast and remained steady in the Midwest and South. The national vacancy rate, including new and existing homes, has been steadily rising since mid-2005”

The Census Bureau’s report also said that the U.S. homeownership rate remained at 67.8 percent in the first quarter, down from a peak of 69.2 percent at the end of 2004.

More cutbacks needed

Global Insight economist Patrick Newport was concerned about the report: “The inventory problem has not gotten any better. And although glut-fighting home builders have reined in construction, they still will have to cut back more.”

The housing market’s five-year boom is quickly becoming a faint memory, as sales and home prices have fallen dramatically over the past two years in once hot sales areas such as California and Nevada.

Last week, a Commerce Department report said sales of new homes plunged in March to the slowest pace in 16 1/2 years. The National Association of Realtors also reported last week that sales of existing homes also fell in March, dropping by 2 percent, with prices declining on a year-over-year basis by 7.7 percent.