U.S. homeownership at 1995 levels despite housing rebound
Homeownership in the United States remained flat last quarter, staying at its lowest level in nearly two decades and underscoring the dominant role investors have played in the housing recovery.
The nation’s homeownership rate was 65.1% on a seasonally adjusted level in the third quarter, unchanged from the second quarter, the Census Bureau reported Tuesday. Homeownership fell from a 65.3% rate in the third quarter last year. Besides the second quarter of this year, home ownership hasn’t been this low since the last three months of 1995.
The fact that homeownership has fallen during the housing rebound shows investors have been a major force in sending home prices skyrocketing. Individuals and Wall Street players have descended on the housing market, looking for bargains and cash flow. They have scooped up many lower-priced homes to flip or rent out.
Their presence has made it difficult for many first-time buyers to compete, but higher prices also helped existing homeowners escape their negative equity positions -- meaning they no longer owe more on their mortgage than their house is worth.
But now, investors have shown signs of pulling back because higher prices have made their investments less attractive. That has raised questions about whether first-time buyers will step in to fill the void, which experts say is key to a continued recovery.
The homeownership rate peaked, on a seasonally adjusted level, amid the housing boom, at 69.4% in the second quarter of 2004.
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