The number of Americans who own their homes continued to decline in recent months and now is at the lowest level since early 1998.
The nation’s homeownership rate stood at 66 percent in the second quarter, down from 66.4 percent in the first quarter and 66.9 percent in the second quarter a year ago, the Census Bureau reported yesterday.
During the boom, when easy credit made mortgages readily available, Americans rushed to buy homes, pushing the ownership rate to a record 69.4 percent in the second quarter of 2004. It remained near that level until Americans began losing their homes to foreclosure or abandoning them in recent years.
The rise in homeownership during the boom “has been more than completely wiped out during the bust,” wrote Paul Dales, senior U.S. economist with Capital Economics, in a client note.
As the foreclosure crisis drags on, the unemployment rate remains elevated and home prices continue to fall, most industry watchers expect the rate to continue to go even lower, possibly below 65 percent. Each 1 percent decline in the homeownership rate represents the movement of 1 million households to rentals.
While some people who lose their homes are opting to rent, apartment operators report that demand is surging, leaving few apartments up for grabs and allowing many landlords to raise rents. Developers nationwide are rushing to build new units.
This demand spike is benefiting investors in publicly held apartment operators. Shares of Equity Residential, one of the nation’s largest landlords, have climbed more than 35 percent in the last 12 months.