2010 Census Bureau figures released this week indicate the home ownership rate is facing its biggest drop since the Great Depression.
The home ownership rate has fallen to 65.1 percent (or 76 million occupied housing units owned by their residents) from 66.2 percent in 2000. The 1.1 percentage point drop is the largest since the Great Depression in 1940. During that time, home ownership rate dropped 4.2 percentage points, reaching 43.6 percent.
While the home ownership rate for 2010 of 65.1 percent still remains overall high, housing experts are concerned that the percentage drop from the last census may signal a future downward trend.
Since 1940, the home ownership rate has gradually been increasing nearly every decade. During the housing boom, the home ownership rate peaked at nearly 70 percent.
But tighter credit and a bleak job picture are all causing home ownership rates to sink lower, analysts say.
Among the Census findings:
- Unemployed young adults are the least likely to own a home.
- The home ownership rate for adults aged 35-64 are at their lowest level in decades. Many middle-aged adults may have suffered from the housing crisis of 2006, facing foreclosures or bankruptcies, the Associated Press notes.
- The home ownership gap between whites and blacks is growing and is at its widest gap since 1960.
Short sale transactions are becoming less popular among first-time home buyers. Buying a home in a short sale transaction may offer a huge bargain sale prices average 27 percent lower than non-distressed properties but more first-time home buyers say the processing delays aren’t worth the trouble.
Among first-time buyers, their short sale purchase share dropped to 39.7 percent of all short sale transactions in August posting a three-month drop and reaching its lowest share ever recorded for first-time home buyers, according to the latest Campbell/Inside Mortgage Finance HousingPulse Tracking Survey. In November 2009, first-time home buyers share of short sales had reached a peak of 54.1 percent of all short sale transactions.
With bargain deals, why are short sales losing their appeal? Buyers are complaining that short sale transactions take too long to close, with approval times often taking several months after a buyer even submits an offers. Some buyers frustrated at the delays are placing offers on multiple properties, planning to close on whichever one is approved the fastest. The average time on market for short sales is 16.6 weeks, and the majority of that time is spent waiting for short sale approval, the HousingPulse Tracking Survey found.
With home prices falling, you are looking for a neighborhood that has a greater likelihood of holding its value with future appreciation. How do you know what neighborhood is not as stable and which will appreciate over time?
Bankrate.com says judging a neighborhoods worth over the long haul comes down to two main factors: Jobs and access to amenities.
For example, Andrew Schiller, creator of NeighborhoodScout, says signs of long-term opportunities for jobs in an area would be low unemployment, high household income, large or prominent colleges and universities, and seats of federal or state government. He says the Bureau of Labor Statistics is a good resource, particularly its Local Area Unemployment Statistics map, which provides unemployment information by metro area and county, as well as its Current Employment Statistics, which tells you how many people are employed in different sectors of the economy in a certain area.
As for judging a neighborhood’s amenities that can generate long-term value, Schiller cites characteristics like a neighborhood that offers a variety of nearby retail stores, low crime rates, parks, distinctive architecture, and good public schools.