Housing industry experts suggest a number of factors are leading to lower homeownerships rates across the United States: the uncertainty of the foreclosure process, the tightening of mortgage requirements and the general state of the economy during its convalescence from the greed and leverage of the first seven years of the new century.
The Census Bureau has released its survey of Residential Vacancies and Home ownership for the fourth quarter of 2010. Based on housing reports, the home ownership rate in the country was at 66.9% during the third quarter of 2010.
The homeowner vacancy rate is the proportion of the homeowner inventory which is vacant for sale. A housing unit is vacant if no one is living in it at the time of the census interview, unless its occupants are only temporarily absent. In addition, this rate is somewhat complicated in that a vacant unit may be one which is entirely occupied by persons who have a usual residence elsewhere.
For the fourth quarter 2010, the homeowner vacancy rate was lowest in the Northeast (2.0 percent) and highest in the South and Midwest (2.8 percent).
For the fourth quarter 2010, the home ownership rates were highest for those householders ages 65 years and over (80.5 percent) and lowest for the under 35 years of age group (39.2 percent). Not surprising. The rates for householders less than 35 years old, 35 to 44, and 45 to 54 years old were lower than their respective rates a year ago, while those householders 55 to 64 and 65 years and over showed no significant change from their corresponding rates in the fourth quarter 2009.
If your an investor, now may be a good time to consider adding to your portfolio. When ownership rates drop rents tend to tick up covering your costs of ownership.
As a potential homeowner, when more homes are standing vacant it presents an opportunity for you.
With a hat tip to Terry Belt and the report he highlighted we present the following reasons why now may be an excellent time to consider purchasing:
1. Home affordability is at a cyclical high. The median mortgage payment on the median priced home as a percentage of the median household income is lower than it’s been in a generation.
2. Mortgage rates are at rock bottom. If they aren’t at rock bottom, they’re close. It’s hard to imagine them going much lower than they did last November. Here we pointed out the opportunities in today’s mortgage market and how rates are so much lower than just a few decades ago.
3. Home prices are back on the rise. After declining since 2008, home prices are trending back upward. And here in Northern Virginia the 2010 median sale price increased 9.4% from 2009 levels.
4. Owning vs. renting is increasingly favorable. Recently, the trend has been for ownership costs to be below rental costs. And there are a number of advantages to buying v. renting.
5. Home ownership is still at the core of the American Dream! A recent Fannie Mae study reveals that the majority of Americans still aspire to own a home – and for good reason. Owning a home is critical to financial stability and wealth building.
So call now, get qualified and find out how home ownership may be the best thing you could do this year.