The nation's housing crisis has forced unprecedented numbers of homeowners out of their homes, made for a difficult homebuying environment, and tainted many Americans' ideal of owning a home. These factors are taking their toll on homeownership in this country.[IMAGE]
The ""Census Bureau"":http://www.census.gov says homeownership in the United States has fallen to its lowest level in more than 13 years.
The nation's homeownership rate dropped to 65.9 percent in the second quarter. That's a full percentage point lower than the second quarter of 2010 and a half a percentage point below the rate recorded in the first quarter of 2011.
Paul Dales, senior U.S. economist with the research firm ""Capital Economics"":http://www.capitaleconomics.com says the increase in the homeownership rate seen during the housing boom has been more than completely wiped out by the bust.
And the decline is not even over yet, according to Dales. He says the poor economic climate, the double dip in house prices, the high number of foreclosures, and tight credit[COLUMN_BREAK]
conditions are all reasons why the homeownership rate will continue to fall.
""With another 3 million foreclosures in the pipeline and no sign of a major improvement in credit conditions or the labor market, demand for owner-occupied housing is likely to remain weak for some years yet,"" Dales said.
The flipside will be a further surge in demand for rented accommodations, Dales notes, which will boost rental rates and bodes well for the multi-family sector, in particular.
In line with the steep declines seen in homeownership, the share of all households renting increased to a new 13-year high of 34.1 percent in the second quarter, Dales explained. That's up from 33.6 percent in the first quarter.
The rental vacancy rate has fallen to 9.7 percent from a peak of 11.1 percent in 2009, which has driven a recovery in rent prices. Dales says investors in the residential rental market could see rental yields of more than 5 percent over the next few years.
Data from the Census Bureau also showed that the homeowner vacancy declined from 2.6 percent in the first quarter to 2.5 percent in the second.
Still, Dales notes that the numbers reflect there are 1.9 million homes up for sale that are still sitting empty. He says another 3.9 million homes are empty but, for one reason or another, are being held off the market.
The excess supply of housing remains high, and Dales stressed that the combination of weak demand and high supply almost certainly will not translate into higher house prices any time soon.