Homeownership Drops Again In The First Quarter | Armonk NY Real Estate

The homeownership rate declined a notch in the latest data to 66.5 percent in the first quarter of 2011, down from 66.6 percent in the prior quarter.  It marks the broad continuing decline since the peak bubble year in 2005, when 69 percent of households were homeowners.  The current homeownership rate matches figures from 1998.

 Here are a few quick additional points to note:

  • The total number of home owning families declined by 279,000 from a year ago.  The number of homeowners now stands at 74.5 million households, versus 37.7 million renting households.
  • The homeowner vacancy rate still remains elevated at 2.6 percent.  A normal rate would be around 1.6 percent, so there are about 700,000 excess vacant homes that need to be cleared off the market before one can say that the market is truly back to normal.
  • The number of homeowners generally grows by one million each year due to rising population, even when there is no change in the homeownership rate.  That has not been the case in recent years.  There has been no growth in the past six years.  In fact, the number of homeowners fell, cumulatively, by one million over the past six years.
  • Homeownership has fallen in all age groups during the housing bust/downturn.  The only exception is the group aged 65 and over.  Their homeownership rate has held mostly steady at 80 percent throughout the boom and bust years.  The latest figure in 2011 showed an 81 percent ownership rate.
  • One factor that can mitigate the decline in homeownership is the upward trend in rents for non-owners.  Apartment rents are rising and are projected to accelerate further over the next two years.

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