Homeownership rate hits 19-year low

In the second quarter, 64.7 percent of Americans owned homes.

By MSN Real Estate partner Jul 29, 2014 9:33AM

© Stockbyte/SuperStockBy Prashant Gopal, Bloomberg

 

The homeownership rate in the U.S. fell to a 19-year low as rising prices and tight credit kept many first-time buyers out of the property market.

 

The share of Americans who own their homes was 64.7 percent in the second quarter, down from 64.8 percent in the previous three months, the Census Bureau said in a report today. The rate matched the level in the second quarter of 1995.

 

Housing has become less affordable and more difficult to finance for entry-level buyers, even as mortgage rates have held close to record lows. First-time purchasers accounted for 28 percent of all sales of previously owned homes in June, compared with about 40 percent historically, according to the National Association of Realtors.

 

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"The first-time buyers are the ones who would be the net addition to homeownership," Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA LLC in New York, said in an interview. "Those people, who are generally college grads or the ones who just got married, are not owning homes like they used to. Credit is tighter, they’re laden with student loans and their incomes are lower than they used to be."

U.S. home prices increased 9.3 percent in the 12 months through May, according to the S&P/Case-Shiller 20-city index released on Tuesday.

 

The homeownership rate for all Americans peaked at 69.2 percent in June 2004 and plunged as the housing market crashed, according to the Census Bureau.

 

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60Comments
Aug 6, 2014 11:59AM
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After looking at some of these comments, I must ask...

When did the "American Dream" become the "American ENTITLEMENT"?
Jul 31, 2014 7:44PM
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The extremist liberal homosexual democrats must be proud of their accomplishment. Now after 6 years of Obama, home ownership hits a19 year low. But of course, it's all George Bush's fault right? God what a bunch of brain-dead morons liberal democrats are.
Jul 31, 2014 7:40PM
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Yet another sterling success for the most feckless, unqualified, incompetent president in US history and the group of pathological liars that support him.
Jul 31, 2014 7:30PM
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hey, I see people living in their new homes everyday. I drive buy communities that are just springing up. Yeah, an old RV here and there among a sprinkling of tents.
Jul 31, 2014 12:13PM
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Dare we say that the smoke and mirrors used to justify obamanomics were, indeed, just a lie?
Jul 31, 2014 5:57AM
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and people say mex are the problem no the Asian are our downfall they have started to take over everything look at our collages full of Asian look at your legal system look at the medical field we have become a 3rd world country from allowing Asians to take over and the stupid people of the good old USA didn't wake up in time it is gone forever almost 70% OF THE WORLD POPULATION IS ASIAN and they bread like rabbits so not only are we in trouble in USA but the whole world is  

Jul 31, 2014 5:28AM
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Maybe more people are trying to owe less money to already swimming in wealth banks.  How do I "own" a house if I'm paying a mortage for 30, 40, 50 years?   Even if it's paid off I still owe property taxes.
Jul 31, 2014 5:16AM
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A home is a consumer product, not an investment.

Sure, you might make money, but you might make money buying any number of consumer products like an Osborn computer, a Palmer pool cue, a '67 Mustang, or just the right pair of "Air Jordans" 

You just have to be lucky or clairvoyant.

It doesn't help that Realtors and Mortgage Ho's blow smoke up your skirt about how your "investment" will make you money and ...

All the taxes you'll saved by deducting your interest and property taxes.  What they don't tell a married couple looking for their 1st house is that the first approx. $12,000 of itemized deductions (mortgage interest, property taxes, state tax and medical, etc.) are of no value since without them, the couple gets to deduct that amount as a standard deduction (without any need for incurring or documenting the cost)..

It's only been about 6 years since the bursting bubble took so many people's life savings and now the shucksters are blowing smoke up your skirt ...

AGAIN ...!!!

Don't even get me STARTED on the BF (bovine feces) coming out of the GOP and the Tea Party.

Jul 29, 2014 1:11PM
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   When you consider the millions who have filed bankruptcy and foreclosed on their homes between 2007 and 2011, home ownership is surprisingly high and still above historic rates before the bubble. It takes 7 to 10 years to fully restore ones credit after a bankruptcy and this has kept allot of people who can afford a home out of the market due to bad credit.

   I would expect this vast pool of home buyers to return to the market in the coming years especially with rates still at historic lows. It wont be a boom, but I would expect the ownership rates to tick up just a little in the next few years.

Jul 29, 2014 1:00PM
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Why does this article just focus on first time home buyers? People can't afford to buy a house when they can't find a good paying job. And what about all of the foreclosures? Article doesn't mention that at all. I guess the economy still not recovering has nothing to do with it?

Jul 29, 2014 12:44PM
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I'll tell you why first time homeowners are not buying. In the past you bought that first home even if it didn't have everything you wanted because it was the FIRST/TEMPORARY home. The plan would be for it to appreciate and you sell it at a big profit and use that money to buy your SECOND/PERMANENT home. Maybe you even settled for a less than perfect 2nd home because that was also a stepping stone to your THIRD/DREAM HOME. The point is that you were willing to compromise because you saw a path to something better.

 

Well now that very un-ideal first home is barely affordable and chances are it may decrease in value, stay about the same, or appreciate a little - but not enough to move up to something better. So now that FIRST home is all you will likely ever be able to afford and it is nothing to get excited about because you are settling. There is no excitement in being stuck forever with a house that you don't really like all that much.

 

The second reason is that everyone knows in this economy you need flexibility and mobility if you should lose your job. There is no job security. People bought houses in the past because there was job security. We are expecting people to make a 30 year commitment or even a 5 year commitment(assuming they can sell it) when they don't even know if they will be laid off, outsourced, downsized, right sized, or  replaced by computers at the drop of a hat. What surprises me is that anyone is buying houses at all.  

Jul 29, 2014 12:40PM
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If our country continues to allow illegals to remain in the US home ownership will plummet. They cannot afford homes unless odumbo gives them to them and that would not surprise me.
Jul 29, 2014 12:13PM
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64.7% down from a peak of 69.2%... So, only 4.5% less than the high?

Sounds like home ownership rates are pretty damn solid. There is no story here.

Jul 29, 2014 12:03PM
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Well according to Bill Clinton (D), Barney Frank (D) and Chris Dodd (D) all who had a hand in deregulating banks said this would never happen.  Lending all kinds of money to people who couldn't afford to pay it back was somehow supposed to improve the housing market.....and some how this is republican's fault according to the Soros owned/ Media Matters/ white house controlled media.
Jul 29, 2014 11:48AM
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College grads can't buy a home because of the burden of school loans. Wages have been stagnant for years, Banks are hoarding money, not loaning and doling out $1.50 a month in interest for ten grand in savings,  people are squatting in abandoned homes, some seniors are being driven out of their house by ridiculous property taxes even if the home is paid off, washed up stars are pitching the beauty of 'reverse mortgages' or hope I don't live long enough to become homeless mortgage. HOA's are becoming little dictatorships charging people at will, and folks renting are subject to greedy landlords charging whatever they want. With so many empty or just flat abandoned homes in this country, it's a crying shame.
Jul 29, 2014 11:42AM
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Tight credit.... thanks banks that use my tax dollars to keep their  @sses in the red.... it's not enough to have collateral at far less that the loan itself (using one of the banks' own appraisers), they want your blood, first born, and this, and that, and the other thing.... thanks Uncle Sam for making keeping your foot on the throat of lenders.... thanks so much.
Jul 29, 2014 11:33AM
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"Those people, who are generally college grads or the ones who just got married, are not owning homes like they used to. Credit is tighter, they’re laden with student loans and their incomes are lower than they used to be."

Not to mention that job security isn't great, nor is the desire to make that entry level job a permanent career.  So why would this recent grads want to commit to home ownership at that point in their lives?  Makes more sense to stay fluid and mobile to take advantage of possible career moves in the first few years.
Jul 29, 2014 11:31AM
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You're telling me that people in my generation with high 5 figure debt, worse or no credit, and a service sector job or three can't buy a house?! No way! I'm 26 and I won't be buying until I'm 40 when most of the baby boomers will try to sell most of their houses at steep discounts since most millennials would rather live in the city instead of the suburbs. I should be able to buy a house very cheaply. One thing I've learned is that a house can be an appreciating asset, particularly the land. However, you never really own the house you live in no matter what. Miss your property taxes? Goodbye house. I also don't see how you can possibly guarantee a salary for 30 years that will cover the mortgage especially one of those gargantuan McMansions. My asset is the ability to remain mobile to move where the jobs are. 
Jul 29, 2014 11:31AM
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In southern CA, the two groups buying homes are foreign (Chinese, Korean) investors, and the already wealthy investors (owners of multiple apartment buildings and homes) who come in with cash and jack up all the prices on the short sales, foreclosures and shut out the average family buyers.  They then manipulate the rental market, because they own so much of it by raising rental prices higher and higher.  Wages are stagnant so regular people are stuck paying more and more money for rent because lenders are requiring larger down payments and excellent credit scores.
Jul 29, 2014 11:05AM
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Come on!  We all know the economy is improving so sayeth the imperial wizard and his band of cronies.  Hey, just look at the stock market!  Who needs a house anyway!  Double and triple up in a rental and get food stamps...it is all good!  Heck, open the borders and let everyone in...it is all cool! 
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