Homeownership rate rises to a 6-year high
The U.S. homeownership rate rose in the fourth quarter to the highest level in six years as low mortgage financing costs helped more people to buy properties.
The share of Americans who own their own home was 65.1%, rising from 64.8% in the same period a year earlier, the Census Department said in a report on Thursday.
The homeownership rate hasn’t been this high since the third quarter of 2013.
The real estate market is continuing to dig itself out of the crater that resulted from the housing crash that began in 2007. The homeownership rate tumbled to a five-decade low of 62.9% in 2016 after 10 million families lost their homes to foreclosure when reckless lending led to widespread defaults.
To put the fourth quarter’s 65.1% in perspective, it took almost nine years – measuring from the beginning of 1996 when the rate was 65.1% – to reach the all-time high of 69.2% at the end of 2004 when President George W. Bush was re-elected to his second term.
Remember the “ownership society” championed by Bush during that campaign? He said he wanted a world where every American owned their own home. That “mortgage for everyone” view helped to fuel the subprime lending boom that led to the collapse.
The homeownership rate for black Americans in 2019’s fourth quarter rose to 44%, a seven-year high, increasing from the record low it reached in 2019’s second quarter. The rate for Hispanic Americans was 48.1%, a two-year high, the Census data showed.
The rate for white Americans was 73.7%, an eight-year high.
The overall rate was highest in the Midwest, at 69.5%, followed by the South, at 66.7%, the Northeast, 62.3%, and the West, 60.3%.
While rising home prices continue to be a challenge, Americans who want to become homeowners are being helped by mortgage rates near three-year lows and an expansion of credit availability.
Mortgage credit availability rose in 2019 and is expected to stay that way this year, the Federal Reserve Bank of New York said in a report last month.
“Reported rejection rates for credit cards, mortgages, and mortgage refinance applications all declined in 2019 compared to 2018,” the New York Fed said
Courtesy of HousingWire