Home Ownership Drops, More People Renting
Home ownership in the U.S. fell to its lowest rate in 15 years during the first quarter of 2012, forcing more people to rent.
According to the latest Census Bureau Data, the percentage of Americans who own their homes dropped a full point over the last year to 65.4% during the first three months of 2012. That’s the lowest rate since 1997.
“This still reflects the after shock of the bursting of the housing bubble. Home ownership had reached unrealistically high levels during the peak of the housing boom and now they are falling back to where they should be” said James Hughes, an economist at the Edward J. Bloustein School of Planning and Public Policy at Rutgers, New Brunswick.
He said there’s still a long way to go before the nation gets back to a sustainable home ownership rate. “We are two percentage points below where we should be right now.”
That is putting pressure back on rental markets, said Hughes.
“The lending standards for mortgages have become much more strict, so buyers really have to meet all of the qualifications like a background check, financial check, and that’s still difficult for many people, who are in turn, renting.”
The median asking rent last quarter was $721, up 5.6% from 12 months ago, according to Census.
Rents are highest in the Northeast, where the median is $932, followed by the West ($845), the South ($660) and the Midwest ($607).