Study: U.S. Homeownership Hit 66% in ’98

U.S. homeownership is booming, reaching a record 66.3% in 1998, although high prices are keeping some would-be buyers out of the market, according to a Harvard University study released today. Rising housing costs in 1998 were mitigated by mortgage rates that were the lowest in three decades, although continued price inflation has made it harder for marginal buyers to afford a home, researchers from Harvard’s Joint Center for Housing Studies found. According to Census Bureau figures, the homeownership rate nationwide was about 64% from 1985 to 1994. U.S. housing prices rose 8% in inflation-adjusted dollars between 1993 and 1998, the study said. Still, lower-income buyers have made substantial gains in homeownership, with loans to buyers with incomes less than 80% of the local median rising by 38% between 1993 and 1997.

Programs to encourage homeownership among low-income and first-time buyers have helped offset rising prices, the study found, as the share of loans requiring down payments of 5% or less has risen from 1% in 1985 to 7% last year, the study said. Meanwhile, on Friday, the National Assn. of Realtors is expected to report that sales of previously owned homes in May remained at one of the highest levels ever. Home resales probably totaled 5.24 million at a seasonally adjusted annual rate in May, the same as April.