You hear it a lot these days: “Now is a great time to buy a home!” Mortgage interest rates are low. Home prices are still on the decline. There’s a huge pile of housing inventory to choose from. It arguably is the time to seize a great deal on the house of your dreams. But, instead of skyrocketing, homeownership rates are actually tanking. New Census Bureau data shows that the homeownership in the U.S. has hit its lowest level in 15 years.
Flashback to 1997. That’s when “Titanic” was released (the first time). “Candle in the Wind” was all over radio airwaves (for the second time). And 65.4% of Americans owned homes. During the first quarter of this year, we reached that number again, a drop of one percentage point from a year before, and down from a peak of 69.2% in 2004. The reason? A lot of Americans were pushed into renting as they lost homes to foreclosures. Plus, experts say tighter lending standards prevented a lot of would-be buyers from qualifying for a mortgage.
Others could be willingly passing up what’s being billed as financial opportunity, and would rather make the decision to stay out of the housing market altogether. Some argue that the idea of homeownership as the American Dream is an obsolete one, and that it actually makes more sense to live as a renter.
The drop in homeownership could be bad news for the 34.6% of Americans who rent their housing. According to Census data, fewer rental homes were on the market during the first quarter – 8.8% last quarter versus 9.7% a year earlier. And as the number of available rentals dwindled, rent prices rose to a median asking price of $721.