In recent years, the nation's homeownership rate has dropped closer to historical averages, after hitting an all-time high of 69.2 percent in 2004. The rate may fall even further, according to a paper by the ""Mortgage Bankers Association's"":http://www.mortgagebankers.org Research Institute for Housing America (RIHA).[IMAGE]
The first-quarter U.S. homeownership rate was 66.4 percent.
In a paper titled ""Homeownership Boom and Bust 2000 to 2009: Where Will the Homeownership Rate Go from Here?"" the RIHA suggests homeownership could fall by one or two percentage points due to factors such as tightened credit.
From the late 1960s to the mid-1990s, homeownership rates remained stable between 64 and 65 percent.
In the middle of the last decade, homeownership increased across all demographics, with the highest increase in the under-30 population.[COLUMN_BREAK]
RIHA attributes the increase to lax credit restrictions and a shift in attitudes toward accepting more risk in homeownership investment.
The tightening of credit after the start of the financial crash in 2007 then led to a decrease back to levels reported in 2000.
Changes in socio-demographic and economic characteristics throughout the country are also partly responsible for the decline, though effects varied depending on the demographic group. Shifts in socioeconomic attributes in those 25 to 35 years old lowered homeownership rates by almost 5 percent between 200 and 2009.
""If underwriting conditions and attitudes about investing in homeownership settle back to year-2000 patterns and, if the socioeconomic and demographic traits of the population look similar to those of 2000, then the homeownership rate may have bottomed out and will not decline further,"" said Stuart Rosenthal of Syracuse University, one of the professors who conducted the study the RIHA issued for the paper.
""If, instead, household employment, earnings and other socioeconomic characteristics over the next few years remain similar to those in 2009, then homeownership rates could fall by up to another 1 to 2 percentage points beyond 2011,"" Rosenthal said.
He predicts declines will be greatest in regions where prices have been most volatile over the past decade.