Homeownership Out of Favor. Rentals in Demand
The U.S Census Bureau has released Residential Vacancies and Homeownership data for the first quarter of 2011.
The data is derived from the Housing Vacancy Survey, which is a supplement to the Current Population Survey. The homeowner vacancy rate is the proportion of the homeowner inventory which is vacant and for sale. The rental vacancy rate is the proportion of the rental inventory which is vacant and for rent. A housing unit is vacant if no one is living in it at the time of the interview, unless its occupants are only temporarily absent. In addition, a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere.
Quick Recap.....
Total Housing Units in the United States: 131.01 million vs. 130.35 million in Q1 2010
How Many Are Occupied: 112.16 million (85.6% of total) vs. 111.41 million in Q1 2010
- How Many Are Owner-Occupied: 74.49 million (56.9% of total) vs. 74.77 million in Q1 2010
- How Many Are Occupied By Renters: 37.67 million (28.8% of total) vs. 36.64 million in Q1 2010
How Many Homes Are Vacant: 18.85 million (14.4% of total) vs. 18.94 million in Q1 2010
How Many Homes Are Being Held of the Market: 7.37 million (5.6%) vs. 7.1 million in Q1 2010
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Excerpts from the Release...
HOMEOWNERSHIP RATES
The homeownership rate of 66.4 percent was 0.7 percentage points (+/-0.4%) lower than the first quarter 2010 rate (67.1 percent) and 0.1 percentage points (+/-0.4%) lower than the rate last quarter (66.5 percent.)
REGION: The homeownership rate declined one or two basis points in all four regions from the rate in the fourth quarter of 2010 and was lowest in the Western Region at 60.9 percent. The Midwest had the highest rate at 70.4 percent followed by the South at 68.4 percent and the Northeast at 63.9 percent.
AGE: For the first quarter 2011, the homeownership rates were highest for those householders ages 65 years and over (81.0 percent) and lowest for those under 35 years of age (37.9 percent). The rates for all age groups but the oldest declined slightly from one year ago
RACE: The homeownership rate for the first quarter 2011 for non-Hispanic White householders reporting a single race was highest at 74.1 percent. The rate for All Other Races householders was second at 56.7 percent and Black Alone householders was lowest, at 44.8 percent. The homeownership rates for non-Hispanic White householders and Black Alone householders were lower than in the first quarter 2010, while the rate for All Other Race householders was not statistically different from one year ago. The homeownership rate for Hispanic householders (who can be of any race), 46.8 percent, was lower than the first quarter 2010 rate.
INCOME: The homeownership rate for households with family incomes greater than or equal to the median family income was lower than the first quarter 2010 rate. The rate for those households with family incomes less than the median family income was lower than the rate a year ago
National vacancy rates in the fourth quarter 2010 were 9.7 percent for rental housing and 2.6 percent for homeowner housing. In the case of rental housing, this was a decrease from the 10.7 percent rental vacancy rate reported one year ago, but homeowner vacancies were unchanged.
HOMEOWNER VACANCY RATES
The homeowner vacancy rate of 2.6 percent was approximately the same as the first quarter 2010 rate (+/-0.2) and 0.1 percentage point lower (+/-0.2) than the rate last quarter (2.7 percent).
URBAN VS. SUBURBAN: The homeowner vacancy rate in principal cities (3.3 percent) was higher than in the suburbs (2.4 percent) and outside MSA’s (2.3 percent). The homeowner vacancy rates in principal cities, in the suburbs, and outside MSA’s were not statistically different from the corresponding first quarter 2010 rates.
REGION: For the first quarter 2011, the homeowner vacancy rate is higher in the South than in the Northeast and West, but not statistically different from the rate in the Midwest. The homeowner vacancy rate in the Northeast was higher than in the first quarter 2010, while the rates in the Midwest, South, and West were not significantly different from a year ago.
RENTAL VACANCY RATES
The rental vacancy rate of 9.7 percent was 0.9 percentage points lower than the rate recorded in the first quarter 2010 (+/-0.5 percentage points) and 0.3 percentage points higher than last quarter (+/-0.4)
URBAN VS. SUBURBAN: For rental housing by area, the first quarter 2011 vacancy rates inside principal cities (9.8 percent), in the suburbs (9.3 percent), and outside Metropolitan Statistical Areas (MSA’s) (10.0 percent), were not statistically different from each other. The rental vacancy rate in principal cities was lower than a year ago, while rates in the suburbs and outside MSA’s were not statistically different from the first quarter 2010 rates
REGION: Among regions, the rental vacancy rate was highest in the South (12.5 percent). Rates were lower in the Northeast (6.8 percent) and West (7.3 percent), but these rates were not statistically different from each other. The rental vacancy rate in the West was lower than in the first quarter 2010, while the rates in the Northeast, Midwest, and South were statistically unchanged.
Plain and Simple: The homeownership rate has decreased steadily since hitting a peak of 69.2 percent in the fourth quarter of 2004 and just fell to its lowest level since the fourth quarter of 1998. More Americans are clearly choosing to or being forced by credit circumstances to rent rather than buy. This is apparent as the rental vacancy rate has dipped 0.9 percentage points over the past year. WHY? The pool of qualified borrowers shrunk considerably as lending standards have tightend. Plus people are simply choosing to wait it out before buying just in case home prices do indeed double dip (already in process). It's one big negative feedback loop. Rentals are in demand...watch out for rent inflation in your area!
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