The rate of homeownership fell at an unprecedented one-year rate to levels not seen since early 2002. Blame a housing hangover from the boom market and the mortgage meltdown.
by Broderick Perkins
© 2008 DeadlineNews.Com
Deadline Newsroom - The rate of homeownership is the latest casualty in the nation's economic crunch.
A one-two combination -- a housing hangover and the mortgage meltdown -- dropped the rate of homeownership by its largest ever one-year decline.
The U. S. Census Bureau said compared to one year ago, the fourth quarter 2007 rate of 67.8 percent represents the largest annual decline in the rate of homeownership since the bureau began tracking the rate in 1965.
Hit hardest was the West where the rate was down to 62.7 percent followed by the Northeast 64.6 percent; the South, 70 percent and the Midwest, 71.7 percent.
The national fourth quarter rate is also as low as its been since the first quarter of 2002. The rate of homeownership peaked at 69.2 percent in the second quarter of 2004, but has been edging down ever since.
Tight mortgage money conditions makes it tough to land the mortgage you need to buy a home, but affordability also remains a big factor.
A recent Center for Housing Policy report found that in 2007 home prices declined in more than three quarters of the 201 metro areas it studied. However, police, firemen, teachers and other community workers still can't afford the median priced home in their community.
Some 40 communities have home prices that require more income to buy in 2007, than in 2006. In Birmingham, AL home buyers need 18.95 percent more income to buy a home in 2007 than in 2006, according to the Census.
Unaffordable home prices linger from the last housing boom when home prices skyrocketed, following ever lower interest rates and easy-qualifying mortgages. First timers joined growing numbers of speculators, move-up buyers and second home buyers. A record numbers of buyers created an unprecedented boom in demand.
Not only have homes become unaffordable to buy, they've also become unaffordable to keep as mortgage interest rates reset, creating higher monthly mortgage payments. A higher mortgage bill has more than a million homeowners into foreclosure, a short sale or other form of homeownership termination.
An additional 80,000 homes sat vacant and available for sale nationwide in the fourth quarter 2007, compared to a year earlier. The 2.18 million vacant homes for sale in the fourth quarter matched a record set in early 2007.
With talk of a recession, the trend is for more terminated homeownerships and greater supplies of homes on the market.
That could mean some bargain basement discounts for some buyers. But if your homeownership is in jeopardy, talk to your lender, a financial counselor or other professional advisor who can help you keep your home.
The Deadline Newsroom offers additional stories on homeownership and related issues.
© 2008 DeadlineNews.Com
Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.
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Thursday, February 7, 2008
Homeownership Plunges At Record Rate
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