Statistics for homeownership in the United States reached their lowest level in 19 years in the June ending quarter of 2014, as financial troubles drove many consumers to rent homes instead of purchasing them.
With seasonality taken into account, homeownership in the June 2014 frame dropped to 64.8 percent. This, according to the Commerce Department, was the lowest share on record since the June 1995 quarter. In the January to March 2014 quarter, homeownership was at 65 percent, while this statistic was at 65.1 percent in the April to June 2013 frame. The highest percentage on record was 69.4 percent, way back in 2004.
As wage growth continues moving at a lukewarm pace and financial institutions continue imposing strict criteria on their consumers, experts believe that homeownership statistics may take a further hit going forward. “We are becoming more of a rental society,” postulated IHS Global Insight economist Patrick Newport. “It’s becoming harder to own a home.”
He added that tighter credit standards and the tendency for those who lost their homes to foreclosure to rent may indeed be the primary variables pushing homeownership figures down in the coming quarters.
All told, the global economic recession has posed an effect on the broader U.S. economy so deleterious that it is taking a considerably long time for many effects to dissipate. Wage growth, while not exactly moving at a lugubrious pace, is far from healthy, even with the unemployment rate at a six-year low. Mortgage rates and home prices are also higher than they were prior to the summer of 2013, and these two factors have made it harder for many consumers to own a home.
As such, rental vacancy has also dropped significantly, with the residential vacancy also at a 19-year low of 7.5 percent.