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Homeownership Levels Lowest Since 1998, More Declines Predicted

Homeownership levels ""posted Monday"":http://www.census.gov/hhes/www/housing/hvs/qtr410/files/q410press.pdf by the ""U.S. Department of Commerce"":http://www.commerce.gov/ are, at 66.5 percent for the fourth quarter, the lowest they have been since the fourth quarter of 1998.

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By contrast the rental vacancy rate decreased 0.9 percent from the rate in the third quarter of 2010, and decreased 1.3 percent from the same period a year before. At 9.4 percent, the rental vacancy rate is the lowest it has been since the first quarter of 2003.

The homeowner vacancy rate was approximately the same as the fourth quarter rate in 2009, and was 0.2 percent higher than Q3 2010.

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An analysis by research firm ""Capital Economics"":http://www.capitaleconomics.com/ says the declining homeownership rate and rising vacancy rate support their view that the combination of weak housing demand and high supply will continue to push home prices down this year.

The firm also says rising demand for rented space combined with tight supply will boost rents.

""Further foreclosures, a continuation of poor economic and tight credit conditions … means that the homeownership rate probably has further to fall,"" says Paul Dales, senior U.S. Economist for the company. ""The desire to own a home is clearly much weaker than it once was.""

Among regions, the rental vacancy rate was highest in the South, at 11.5 percent, and lowest in the Northeast and West at 7.5 and 7.9 percent, respectively.

Around 85.9 percent of the housing units in the fourth quarter were occupied and 14.1 percent were vacant. Owner-occupied housing units made up 57.2 percent of the total, and renter-occupied units made up 28.8 percent. Vacant year-round units were 10.8 percent of total housing units, while 3.3 percent were for seasonal use.

Total housing units came in at 130,845.

About Author: Joy Leopold

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