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Homeownership Rates Wallow at Nearly 15-Year Lows

Homeowners moved closer to the sidelines last year, buying fewer homes than in 2010 and edging homeownership toward lows not seen since the 1990s.


The ""Commerce Department"":http://www.commerce.gov/?wvsessionid=3ae5b231ebd24d928b4920259289dd3b released figures Tuesday that posted 66 percent for homeownership rates last quarter, reflecting declines by 0.5 percent year-over-year and 0.3 percent on a quarterly basis.

Homeownership vacancy rates hovered around 2.3 percent last quarter, 0.4 percentage points lower than numbers seen by yearend 2010.

Vacancy rates for renters last year stayed near the same from the fourth quarter of 2010.

""The share of Americans who are willing and able to own their


own home is still falling,"" ""Paul Diggle"":http://www.capitaleconomics.com/staff/property-economics/paul-diggle.html, a property economist with consultancy ""Capital Economics"":http://www.capitaleconomics.com/, said in a note.

During the fourth quarter last year, owner-occupied units tallied up to 56.9 percent in contrast to renter-occupied units, which represented about 29.3 percent of the housing inventory in late 2011.

About 5.4 percent of total housing inventory stayed off the market.

Homeownership continues to decline despite all-time highs for affordability in the market.

Mortgage rates consistently remain below 4 percent. Mortgage giant ""Freddie Mac"":http://www.freddiemac.com/ reported that interest rates for the 30-year fixed-rate mortgage climbed to 3.98 percent last week, up from an all-time low of 3.88 percent.

Homes in distress continue to sell at rates below the market average, as ""RealtyTrac"":http://www.realtytrac.com/home/ revealed last week with data that found foreclosed properties on sale for 34 percent less than the typical price of a non-distressed home.

Diggle said that the latest figures suggest that record-low homeownership rates ""may still have further to run"" in lieu of results from a Fed Senior Loan Officer Survey Monday that showed credit slightly improved early this year.

""With house prices still falling for now, it will be a while yet before homeownership is once again seen as an essential part of the American Dream,"" he said.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.

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