Real Estate Market

Rate of homeownership nears 11-year low

by Broderick Perkins

(08/02/2010) Revealing the lingering effects of the housing market's hangover, the level of homeownership in the second quarter this year sank to its lowest rate in nearly 11 years.

In the second quarter of 2010, owner-occupied households represented 66.9 percent of all households, a number not seen since the fourth quarter of 1999. The rate was down from 67.1 percent in the first quarter of 2010 and down from 67.4 percent in the second quarter a year ago, according to the Commerce Department.

Vacancy rates also suffered deja vu.

The 2.5 percent homeowner vacancy rate was 0.1 percentage point lower than last quarter, and identical to the same period a year ago. The number reflects the share of homes that were unoccupied and for sale.

Likewise, rental vacancies stood at 10.6 percent, unchanged from both the first quarter and this time last year and the highest rate since the Commerce Department started keeping track in 1965.

Despite a nationwide housing fire sale and mortgage rates that have been on record-breaking slide, the outlook for a homeownership rate reversal remains bleak for the near future.

Americans just aren't in a buying mood, according to the Conference Board's latest consumer confidence survey. The New York-based research group's index of consumer sentiment fell to 50.4 in July, the lowest level in five months.

Other second quarter findings from the Commerce Department:

• Rental vacancies were highest in the South (13.2 percent), while rates were lower in the Northeast (8.3 percent) and West (8.0 percent).

• Approximately 86 percent of the nation's housing units were occupied, 14.4 percent were vacant. Owner-occupied housing units comprised 57.3 percent of all housing, while renter-occupied housing accounted for 28.3 percent.

• Homeownership rates were highest for householders 65 years old and up (80.4 percent) and lowest for the under-35 crowd (39.0 percent). The rates for householders ages 35-44, 45-54 and 55-64 were lower than their respective rates a year ago, while those householders younger than 35 and those 65 years and over showed no significant change from their corresponding rates in the second quarter of 2009.

Crystal Chow is a DeadlineNews Group associate editor who contributed to this article.

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