Homeownership Rates Near All Time Low
Homeownership rates are declining despite the increase in the number of home sales transactions. After the banner year of 2015, the first quarter of the year saw homeownership rates fall to 63.6 percent. This was confirmed by the Census Bureau, as reported on CNBC.com.
The previous higher was at 69.4 percent way back in 2004 when the mortgage lending was in its fast and loose phase. Nowadays, the homeownership rate is just one tenth of one basis point above the all time low in the second quarter of 2015.
Even with the economy showing positive signs, especially in the job market sector which is directly related to the growth of the housing market, job security does not mean the decision to buy a home is set in stone. Many factors affect the current first time buyers in their decision to invest in a home for the long term. These include high student loan debt, very strict mortgage underwriting regulations as well as steep prices of homes.
Homeownership for those between the ages of 25 and 34 in the current population is nearly 10 percent lower than the population of homeowners ten years ago. Nowadays, only 30 percent of the buyers are first time homeowners.
And the travail of first time buyers continues, as home prices particularly in the west are on the rise. According to a report from MarketWatch, prices of homes have risen at a rate of 5.4 percent in the twelve months ending February 2016. The highest rates of increase can be found in the cities of Denver and Portland, where prices have risen in the double digits.
Even rental rates are increasing. Quoting a report from the Commerce Department, the same article pegged the median rental price at $870 for the first quarter of 2016. This is an 8.9 percent increase from the first quarter of 2015.