The Lowest Homeownership Rate in Almost Two Decades

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The homeownership rate calculated by the US Census Bureau has revealed that fewer people own a home compared to the past 19 years. The latest data from the first quarter of 2014 reveals that more and more people opt for renting instead of homeownership. This is explained with the falling affordability of housing especially in the largest metropolitan areas in the country.

During the first quarter of 2014, the homeownership rate was 64.8%. This is the lowest level since the first quarter of 1995. Between the mid 1990’s and the mid 2000, homeownership was on the rise. It reached its highest point in the first quarter of 2005 when it was slightly over 69%. The rate started going down in 2006 and fell rapidly between 2007 and 2011 during the crisis in the housing and mortgage markets. Since 2011, the rate of decrease of homeownership has been lower, but the number of homeowners still falls to reach the current minimum.

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The decrease in homeownership naturally coincided with an increase in the number of households that rent a property. The rate of household renting is expected to increase in the coming months. At the same time, economists predict that the rate of homeownership will reach a bottom level of 64% in 2015.

The fall in homeownership coincides with increasing stability in the housing market. Home prices have increased by an average of 11% on an annual basis and continued to rise during the first quarter of 2014. Despite the recovery of the value of homeownership, many people cannot afford to buy a house. The primary reason for this is that the house prices increase at a faster rate compared to income. The increase in demand in the housing market comes primarily from investors who are looking to buy rental properties. The annual increase of the mortgage rate by 1% has also had a negative effect.

Overall, homeownership will most likely decrease even further.

Christian

Christian

Christian Calvin mortgage Christian is a contributing writer for Mortgage.info. He is a graduate from the University of Tennessee with a degree in Communications and a concentration in Broadcasting. Christian has served as vice-president for a privately-held company for more than 20 years. Additionally, he has also applied his writing and business knowledge to various websites with a focus on business and sports news . . . both of which are passions. Christian enjoys playing golf and spending time with his family and friends.

Contact: christian@mortgage.info
Christian

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