Us homeownership continues to decline

Photo: WoodleyWonderWorks

The US economy has been enjoying a gradual recovery from the recession in the past year. As the pace of recovery slowed unexpected at the start of 2015, though, new figures from the US Census show that homeownership is still declining. The rate of homeownership fell to 63.7 per cent in the first three months of the year,  1.1 percentage points below the same period a year ago and 0.3 per cent down on the previous quarters.

This is the lowest data since 1995, according to the US Census report. For the first quarter of 2015, homeownership rates were highest in the Midwest (68.6 per cent) and lowest in the West (58.5 per cent). The homeownership rates in the Northeast, South and West were lower than the rates in the first quarter 2014, while the rate in the Midwest was not statistically different from the rate a year ago.

Homeownership was highest among non-Hispanic White householders (72 per cent), compared to 55.4 per cent (All Other Races) and 41.9 per cent (Black Alone).

The figures arrive at the same time as RealtyTrac's latest sales report, which found that owner-occupant buyers accounted for 63.2 per cent of all residential single family home and condo sales in the first quarter of 2015, down from 65.8 per cent in the previous quarter. The 68.6 per cent year-on-year fall took the level down to the lowest quarterly level since the first the three months of 2011.

Nonetheless, signs of the market's improvement can be found in another key trend: that of institutional investors. RealtyTrac categorises them as entities who purchase at least 10 properties in a calendar year. On that basis, a total of 14,621 single family homes were sold to institutional investors in the first quarter of 2015, accounting for 3.4 per cent of all sales - down from 6.2 per cent a year ago - which is the lowest share in four years.

"Investor activity continues to represent a disproportionately high share of all home sales activity in this housing recovery, but unlike the past three years the large institutional investors are backing out while the smaller, mid-tier and mom-and-pop investors are remaining active," explains Daren Blomquist, vice president at RealtyTrac.