Homeownership Falls to 19-Year Low Amid Credit Crunch
The homeownership rate in the U.S. fell to a 19-year low as rising prices and tight credit kept many first-time buyers out of the property market.
The share of Americans who own their homes was 64.7% in the second quarter, down from 64.8% in the previous three months, the Census Bureau said in a report today. The rate matched the level in the second quarter of 1995.
Housing has become less affordable and more difficult to finance for entry-level buyers, even as mortgage rates have held close to record lows. First-time purchasers accounted for 28% of all sales of previously owned homes in June, compared with about 40% historically, according to the National Association of Realtors.
"The first-time buyers are the ones who would be the net addition to homeownership," Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, said in an interview.
"Those people, who are generally college grads or the ones who just got married, are not owning homes like they used to. Credit is tighter, they're laden with student loans and their incomes are lower than they used to be."
Home prices increased 9.3% in the 12 months through May, according to the S&P/Case-Shiller 20-city index released today.
The homeownership rate for all Americans peaked at 69.2% in June 2004 and plunged as the housing market crashed, according to the Census Bureau.