2010-11-03 07:03:53
By ALAN ZIBEL, AP Real Estate Writer Alan Zibel, Ap Real Estate Writer Tue
Nov 2, 12:46 pm ET
WASHINGTON The nation's homeownership rate remained at its lowest in more
than a decade, hampered by a rise in foreclosures and weak demand for housing.
The percentage of households that owned their homes was unchanged at 66.9
percent in the July-September quarter, the Census Bureau said Tuesday. That's
the same as the April-June quarter.
The last time the rate was lower was in 1999, when the rate was 66.7 percent.
For decades, 64 percent of American homes were owned by their occupants. That
began to climb in 1995, with strong encouragement from President Bill Clinton
and later on from President George W. Bush.
Democrats, including Rep. Barney Frank, D-Mass., pushed for mortgage buyers
Fannie Mae and Freddie Mac to purchase more loans targeted toward low-income
Americans. Republicans encouraged subprime lending to borrowers with weak
credit and fought off regulation of the industry, despite warnings that many of
those loans had predatory terms.
Homeownership hit a peak of more than 69 percent in 2004 at the height of the
housing boom. But the housing bubble burst in 2006 and the rate has been
declining gradually since then.
"They just assumed: The more homeownership the better," said Dean Baker,
co-director of the Center for Economic and Policy Research, a liberal
Washington think-tank.
A record number of foreclosures and tight lending standards are expected to
keep pushing the homeownership rate down and it will eventually return to
pre-1995 levels, said IHS Global Insight economist Patrick Newport.
The housing troubles have brought the government's role in promoting
homeownership into question. Most analysts agree that both the Clinton and Bush
administrations placed too much emphasis on encouraging homeownership
promoting and enabling loans to borrowers with poor credit and those with small
down payments.
"The consensus is, in a lot of cases, it just makes sense for a lot of people
to rent," Newport said.
About 18.8 million homes, or 14.4 percent of all houses and apartments, were
vacant, according to the government survey. Without vacation homes, that rate
would be 11 percent.
The number of vacant homes has soared over the past four years from about 16
million at the start of 2006. It has been hovering around 19 million since the
end of 2008. There are around 131 million housing units nationwide, according
to the Census Bureau.
About 2.5 percent of all primary residences were vacant and for sale and 10.3
percent of all year-round rental units were listed as vacant and for rent.
Banks have seized more than 816,000 homes through the first nine months of the
year and are on pace to seize more than a million, according to foreclosure
listing service RealtyTrac Inc.