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Despite low mortgage rates and home prices, the first quarter of this year saw the rate of homeownership fall to its lowest level in 15 years.
According to the Census Bureau, the homeownership rate fell to 65.4 percent at the end of the quarter, to the same level it was in 1997. The reasons for the decline include tight lending standards, loss of confidence in the housing market and a sluggish economy.
Homeownership reached its peak of 69.2 percent in 2004. Since 2006, it has been falling off, with the Northeast seeing the biggest decline from a year ago.
Meanwhile, the rental population has swelled as a result of people losing their homes to foreclosure and potential buyers who don't meet the high credit standards for a mortgage. The rental vacancy level is 8.8 percent, the same as it was in the second quarter of 2002. With higher demand, though, come higher prices. Median rental rose to its highest monthly rate since second-quarter 2009, to $721.
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Banks requiring LTVs of 20% to 35% exclude many people from buying and/or refinancing especially if they originally purchased a home in 05-07 time period. We know a lot of folks that have never missed a payment in 5, 7 years but cannot refi because they took an 80-10-10 back in the day and while they have equity, it is not enough for the banks who want a cash infusion. Good money cleaning up bad money at the banks. It is what it is, I guess. Hopefully we rifle through the foreclosures and see home prices continue to tick up in more parts of the country.