gmhTODAY 04 gmhToday Sep Oct 2015 - Page 19

T he national homeownership rate has followed the trajectory of a bumpy rollercoaster with a series of up-and-down movements in the past 20 years, and the end of 2014 marked a period of notable decline. This downward trend has fueled speculation about the future of homeownership in the United States following risks exposed during the recession and foreclosure crisis, as the U.S. rate fell to the lowest level in more than two decades in the fourth quarter of 2014. Specifically, Commerce Department estimates put the U.S. homeownership rate at 63.9 percent in the fourth quarter—a level the country has not seen since the third quarter of 1994. In looking at the history of the national homeownership rate, it rose steadily through the late 1960s and 1970s, from 63 to 65.6 percent, before declining slightly in the early 1980s. To address a decade of stagnation, national leaders pushed forward efforts to expand homeownership in the mid-1990s, which led the rate to rise rapidly from 1994 to 2004, from 64 percent to a record high of 69 percent. However, as we are now seeing, the national homeowner- ship rate has declined almost fully back to its 1994 level. While the decline has provoked worry about homeownership access, many experts believe that the fall in the homeownership rate actually is at the tail-end of its decline and that advantageous conditions are percolating. For example, mortgage delinquency and foreclosure rates have greatly decreased, wage growth is expected to follow a period of strong job growth, and there are signs that mortgage credit conditions are improving. It is also worth noting that the declining homeownership rate does not necessarily spell trouble for the recovery of the housing market. Researchers at Goldman Sachs noted that it is fair to interpret this lower homeownership rate as being driven by a large denominator such as more households, which indicates a positive market force, i.e., strong housing demand. Therefore, Bust to Boom? Goldman Sachs research posits that the latest decline in the homeownership rate is due to the increasing number of renters rather than a decreasing number of homeowners, and that the U.S. housing recovery is ongoing with the expectation that household formation and homebuilding will normalize over the coming years. This is bolstered by recent data on rentals: The vacancy rate in the rental market is near a 20-year low, with the homeownership rate falling as more households rent. This is evident in the large uptick in household formation over the past year, as there were 2 million more renter households and 350,000 fewer owner households, according to the Commerce Department. The 2014 fourth quarter rental vacancy rates dropped 1.2 percent from 8.2 percent in 2013 to 7 percent in 2014, according to the Census Bureau’s Housing Vacancy Survey (HVS) data. That being said, complications remain for the recovery of the homeownership rate due to increasing challenges associated with affordability. Rising prices and a tight supply of lower-end listings have put homes out of reach for many younger, entr äµ±•Ù•°)‰Õå•É̸½È•á…µÁ±”°Ñ¡”É…Ñ”½˜¡½µ•½Ý¹•ÉÍ¡¥À¥Ì)¡¥¡•ÍЁ™½È¡½Õ͕¡½±‘•É́ݡ¼…É”€Øԁ…¹½±‘•È…¹)±½Ý•ÍЁ™½È¡½Õ͕¡½±‘•É́չ‘•È€ÌÔ¸½É‘¥¹œÑ¼)…¹…±åͥ́‰äÑ¡”!…Éمɐ)½¥¹Ð •¹Ñ•È™½È!½ÕÍ¥¹œ)MÑՑ¥•Ì°Ñ¡”¡½µ•½Ý¹•ÉÍ¡¥ÀÉ…Ñ”™½Èå½Õ¹œ…‘Õ±ÑÌ)…•Ì€ÈԁѼ€ÌаÝ¡¥ É½Í”™É½´€ÐԁÁ•É•¹Ð¥¸Ñ¡”)µ¥´ÄääÁ́Ѽ„¡¥ ½˜€ÔÀÁ•É•¹Ð¥¸€ÈÀÀа™•±°Ñ¼(ÐÀÁ•É•¹Ð…́½˜±…ÍЁ啅ȰÉ•Áɕ͕¹Ñ¥¹œÑ¡”±…ɝ•ÍÐ)Á•É•¹Ñ…”‘•±¥¹”¥¸¡½µ•½Ý¹•ÉÍ¡¥À½˜…¹ä…”)É½ÕÀ½Ù•ÈÑ¡”±…ÍЀÄÀå•…É̸)½¹½µ¥Œ‘¥ÍÑɕÍ́Íѕµµ¥¹œ™É½´Ñ¡”É••ÍÍ¥½¸)•Éх¥¹±ä½¹ÑÉ¥‰ÕѕÑ¼Ñ¡¥Ì‘•±¥¹”°‰ÕЁ¹•Ü)ɕ͕…ɍ ¹½Ñ•ÌÑ¡…Ё±½¹•ÈµÑ•É´°Í½¥¼µ‘•µ½É…Á¡¥Œ)¡…¹•ÌÁɽ٥‘”„‰É½…‘•ÈÁ¥ÑÕɔ•áÁ±…¥¹¥¹œÑ¡”)‘•±¥¹”¥¸¡½µ•½Ý¹•ÉÍ¡¥À…µ½¹œÑ¡¥ÌÁ…ÉÑ¥Õ±…È)‘•µ½É…Á¡¥Œ¸ƒŠq!¥¡•ÈÍ¡…ɕ́½˜µ¥¹½É¥Ñ¥•Ì°±½Ý•È)Ʌѕ́½˜µ…ÉÉ¥…”…¹™…µ¥±ä™½Éµ…Ñ¥½¸°…¹¥¹É•…Í•)™½Ṍ½¸•‘Ս…Ñ¥½¸…¹…É••È‘•Ù•±½Áµ•¹Ð¥¸)Ñ¡”•…ɱäå•…É́½˜…‘ձѡ½½¡…Ù”…±°½¹ÑÉ¥‰Õѕ)Ѽ™•Ý•ÈÁ•½Á±”‰Õ她œ¡½µ•Ì¥¸Ñ¡•¥È€ÈÁ́…¹)•…ɱä€ÌÁ̳Št¹½Ñ•„!…ÉمɐÉ•Á½ÉиA½Íе‘½Ñ½É…°)™•±±½Ü…¹É•Í•…ɍ¡•ÈI…¡•° ½…É‘Ṍɕ܁…‘‘•è+Šq•µ½É…Á¡¥ŒÍ¡¥™Ñ́…±½¹”Í¡½Õ±¡…Ù”…ÑՅ±±ä)±½Ý•É•Ñ¡”¡½µ•½Ý¹•ÉÍ¡¥ÀÉ…ѕ́½˜å½Õ¹œ…‘Õ±ÑÌ)ͱ¥¡Ñ±ä‰•±½ÜÑ¡•¥È½‰Í•Éٕ€ÈÀÄЁ±•Ù•°½˜€ÐÀ)Á•É•¹Ð»Št ÕÍЁѼ ½½´ü)ÉÑ¥±”…¹MхÑ́Aɽ٥‘• äè)5…Éф¥¹Íµ½É”°I•…±Ñ½È)%¹Ñ•É¼I•…°ÍхєM•ÉÙ¥•Ì)¥¹Íµ½É•Q¡•A½Ý•É=™Qݼ¹½´(ÐÀà¸àÐÀ¸ÜÐÈÀ)I€ŒÀÄÌÔÈÌÌä)M•…¸¥¹Íµ½É”°I•…±Ñ½È)%¹Ñ•É¼I•…°ÍхєM•ÉÙ¥•Ì)¥¹Íµ½É•Q¡•A½Ý•É=™Qݼ¹½´(ÐÀà¸àÐÀ¸ÜÌÈÜ)I€ŒÀÄäØØÐÀÔ($$($($)ÁÉ¥°€ÄÑ¡Éԁ5…ä€ÌÄ°€ÈÀÄÔ$))Õ¹”€ÄÑ¡Éԁ)Õ±ä€ÌÄ°€ÈÀÄÔ)Ñ¥Ù”1¥ÍÑ¥¹Ì$Ðà$($M¡½ÉЁM…±”€$(À$($ …¹¬$$(Ä$)ٕɅ”1¥ÍЁAÉ¥”€Ä°ÀÔÑ,$(äÀÉ,$)ٕɅ”‘…ǻ½¸µ…É­•Ð$(ÈÔ$€ÐØ$(Ì(Ä$(ààÙ,(ÈÜ$) ±½Í•M…±•Ì$ÄÄÐ$($M¡½ÉЁM…±•Ì$(à$($ …¹¬=ݹ•M…±•Ì$(Ð$)ٕɅ”1¥ÍЁAÉ¥”$(ØÜÝ,$)ٕɅ”M…±•ÌAÉ¥”$(ØàÅ,$)ٕɅ”…ǻ½¸5…É­•Ð$(ÐÐ$€ÄÈÜ$(Ì(Ð(ÜØÍ,$(ÜØÍ,$$(ÌÜ$)%1I=dƒŠˆ5=I8!%10ƒŠˆM85IQ%8)MAQ5 H½= Q= H€ÈÀÄÔ)µ¡Ñ½‘…乍½´(Ä