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Homeownership at 19 Year Low

by devteam July 31st, 2014 | Share

The rate of homeownership in the U.S.rncontinued to slide in the second quarter of 2014, reaching a 19 yearrnlow. The Commerce Department said that the seasonally adjustedrnhomeownership rate fell to 64.8 percent during the quarter, down 0.1rnpercentage point from the first quarter and 0.3 points compared tornthe second quarter of 2013. The recent rate was the lowest for thernstatistic since the second quarter of 1995.</p

Homeownership peaked at 69.4 percent inrnthe second quarter of 2004 and stayed within a range of 68.0 and 69.0rnover the next 13 quarters before falling below 68.0 in the fourthrnquarter of 2007. While there have been quarterly ups and downs thernhomeownership rate has eroded at a fairly steady rate since then. </p

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Homeownership was highest in thernMidwest at 69.6 percent, 0.3 percentage points above the rate in thernfirst quarter, also the highest in the nation, and up 0.2 points fromrnone year earlier. The West had the lowest rate at 59.6 percentrncompared to 59.4 percent in the first quarter and 59.4 percent in thernsecond quarter of 2013. </p

The rate in the Northeast was 62.1rnpercent, down 0.3 point quarter over quarter and 1.1 point from thernsame quarter the prior year. The South dropped from a 66.5 percentrnrate a year ago to 65.9 percent in the second quarter of this year. The rate in the first quarter was 66.5 percent. </p

As numerous studies have pointed out inrnthe last year, young people today are not the homeowners their agerngroup typically was even a few years ago. The homeownership rate forrnpersons under the age of 35 was 35.9 percent in the second quarter,rnabout half the rate of those 45 to 54 years of age and way below thern80.1 percent rate of Americans over the age of 65. As recently asrn2008 and 2009 the homeownership rate for those under 35 was over 40rnpercent.</p

The Commerce Department estimates thatrnthere were 133.21 million housing units in the U.S. in the secondrnquarter, an increase of 467,000 units from Q2 2013. Of the totalrn115.13 million units were occupied, 74.46 million by the owner andrn40.67 million by a renter. In the previous quarter 114.67 millionrnunits of the total housing stock were occupied, 74.53 million byrnowners and 40.14 million by renters. Vacant units totaled 18.08rnmillion units in the second quarter of 2014, </p

The national vacancy rate was 7.5 percent for rental housing andrn1.9 percent for homeowner housing. Rental vacancies declined by 0.7rnpercentage points from the second quarter of 2013 and were 0.8 pointrnlower than in the first quarter. Homeowner vacancies werernessentially unchanged from a year earlier and 0.1 point below thernrate the previous quarter. Rental vacancies were the lowest since atrnleast the beginning of 2005 while homeowner vacancies had not droppedrnas low since the third quarter of 2005. </p

The rental vacancy rate was highest inrnthe South (9.6 percent), followed by the Midwest (7.5 percent). Thernrates in the Northeast and West were each 5.8 percent. Thernhomeowner vacancy rate was highest in the South (2.1 percent); thernother three regions each had owner vacancy rates of 1.7 percent. </p

Approximately 86.4 percent of all U.S.rnhousing units were occupied in the second quarter while 13.6 percentrnwere vacant. Owner-occupied housing units made up 55.9 percent ofrntotal housing units, while renter-occupied units made up 30.5 percentrnof the inventory. Vacant year-round units comprised 10.2 percentrnof total housing units, while 3.4 percent were for seasonal use. Vacant units that were held off market comprised 5.8 percent of therntotal housing stock. </p

Where vacant units were available forrnrent the median asking price was $756. Vacant for sale units had arnmedian listing price of $151,800.

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About the Author

devteam

Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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