The last time the homeownership rate in the United States was this low, Lyndon Baines Johnson was wreaking havoc as president, “The Sound of Music” was the No. 1 motion picture at the box office and the Los Angeles Dodgers were World Series champions.
According to new numbers from the U.S. Census Bureau, the homeownership rate dipped to its lowest level in more than 50 years. For the second consecutive quarterly decline, the homeownership rate stood at 62.9 percent in the second quarter.
The decline in the homeownership rate has been occurring since the last housing boom. Tight credit and more consumers deciding to rent are taking the blame for the low rate of homeownership. Moreover, first-time buyers can’t seem to find affordable homes, even with an enhanced labor market and low mortgage rates, thanks to the Federal Reserve printing press.
In May, home prices spiked 5.2 percent compared to the same time in the previous year.
“The drop in the homeownership rate this quarter to historical lows isn’t necessarily a bad sign,” Ralph McLaughlin, chief economist for data provider Trulia, told Bloomberg. “This is because renter households are growing at a much faster rate than owner households, reflecting growing confidence of those who were most likely impacted by the foreclosure crisis. Still, low inventory and affordability plagues those who do want to buy a home.”
The homeownership rate reached a peak in June 2004 when it hit 69.2 percent.
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