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Homeownership Rate Plummets to 15-Year Low

*_Correction: Homeownership rates fell to 65.4 percent._*

Homeownership rates dropped to 65.4 percent in the first quarter, reaching lows not seen in fifteen years, the Census Bureau said Monday.

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According to government data, the homeowner vacancy rate also fell to 2.2 percent nationwide, down from 2.6 percent in the first quarter of 2011 and the rental vacancy rate dropped to 8.8 percent from 9.7 percent one year earlier.

The homeowner vacancy rate reached its lowest level since first quarter 2006.

The median asking sale price for a vacant home fell to $133,700 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the lowest level since second quarter 2005 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô from $133,800 in the fourth quarter and $143,700 one year earlier.

The median asking rent in the first quarter rose to $721 from $712 in the fourth quarter and $683 in the first quarter of 2011.

The homeowner vacancy rates in principal cities (2.5 percent) and outside MSA's (2.6 percent) were higher than in the suburbs (1.9 percent), the Census Bureau said in its quarterly report.

The homeowner vacancy rates in principal cities and suburbs fell lower than a year ago, while the rate outside MSA's achieved levels not statistically different from the first quarter in 2011, according to the report.

Within census regions, the rental vacancy rate was highest in the South (10.8 percent) and lowest in the West (6.3 percent). The rental

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vacancy rate in the Northeast was higher than in the first quarter 2011, while the rates in the Midwest, South, and West were lower than a year ago.

For the first quarter 2012, the homeowner vacancy rate was higher in the South than the Northeast, but not statistically different from the rates in the Midwest and West.

The homeowner vacancy rates in the Midwest, South, and West were lower than a year ago, while the rate in the Northeast was not statistically different from the first quarter 2011 rates.

The number of housing units increased 486,000 in the past year. The number of occupied units went up by 1,011,000 while the number of vacant units fell 524,000.

The number of homes held off the market increased 203,000 to 7,633,000 in the last year; the number of vacant year-round homes fell 388,000 to 13,994,000 and the number of vacant year-round homes for sale dropped to 1,653,000 from 2,006,000.

The homeownership rate fell in all four census regions in the first quarter ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô the steepest drop in the Northeast, 1.2 percentage points to 62.5 percent. The homeownership rate fell 0.8 percentage points in the South to 67.5 percent; 0.5 percentage points in the Midwest to 69.5 percent and 0.2 percentage points in the West to 59.9 percent.

For the first quarter 2012, the homeownership rates were highest for those householders ages 65 years and over (80.9 percent) and lowest for the under 35 years of age group (36.8 percent).

The rates for householders less than 35 years, 35 to 44, 45 to 54, and 55 to 64 years old were lower than their respective rates a year ago, while householders 65 years and over showed no significant change from the corresponding rates in the first quarter 2011.

""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 Monday that homeownership rates may slip to roughly 65 percent by yearend if current trends hold.

├â┬ó├óÔÇÜ┬¼├àÔÇ£And if the 1990s downturn is any guide, it will be a few years after [this year] before the homeownership rate really starts to improve,├â┬ó├óÔÇÜ┬¼├é┬Ø he added.

About Author: Mark Lieberman

Mark Lieberman is the former Senior Economist at Fox Business Network. He is now Managing Director and Senior Economist at Economics Analytics Research. He can be heard each Friday on The Morning Briefing on POTUS on Sirius-XM Radio 124.
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