United States is facing a slump in total homeownerships rate which is all time lowest since last 19 years or even more. This fall is due to heavy shifts to renting market and less purchasing power capacity of many potential buyers.
According to US Census Bureau, total Americans who have homeownerships showing 64.4 percent in third quarter of 2014 which is comparatively lower from second quarter which was 64.7 percent. The rate is the lowest ever since the first quarter of 1995.
The new buyers have held their intentions off due to rigorous mortgage criteria and weak growth of wage. The share for entry-level buyers was estimated to be 29 percent in the month of September consecutively in third quarter which was 40 percent in past decades, claimed by National Association of Realtors
The reputable real estate economist in US, Paul Diggle said, “The homeownership rate hasn’t bottomed yet. Something like 64 percent seems like a reasonable floor. But that floor is now in sight”
The country experienced high homeownership rate by 69.2 percent in the month of June 2004, though it is near to the average rate of 64.5 percent during the age of 1965 to 1999, data gathered by a Bloomberg.
This major is all happened as a result of dreadful recession hit to US economy that led many people shifted to rentals and many landlords lost their possessions to foreclosure and present buyers don’t have enough resources and buying capacity to own a home or strict loan conditions make them inapplicable to meet the criteria of acquiring loan.
Rental Vacancies
According to US Census Bureau, the total vacancy rate of rental houses was 7.4 percent in the third quarter which is the lowest ever since starting quarter of 1995. However, the rate is also lower than second quarter of 2014 when vacancy rate was 7.5 percent.
The vacancy rate for home owners also dropped to 1.8 percent in third quarter, down 0.1 percent from last year’s second quarter showed 1.9 percent.
However, the total homes with ownerships reduced to 74.2 million in third quarter as compared to 74.9 million last year. On the other hand, renter-occupied houses illustrated a boom to 41.1 million up 39.9 million earlier year.
