The nation’s homeownership rate was 65.1% on a seasonally adjusted level in the third quarter, the Census Bureau reported. Homeownership hasn’t been this low since the last three months of 1995.
The fact that homeownership has fallen during the housing rebound shows investors have been a major force in sending home prices skyrocketing. Individuals and Wall Street players have descended on the housing market, looking for bargains and cash flow. They have scooped up many lower-priced homes to flip or rent out. Last month 33 percent of all existing home sales in the US went to “all-cash” sales, a massive part of the market. Since the typical American doesn’t have much money saved to purchase homes, these are not your typical first-time home buyers.
But now, investors have shown signs of pulling back because higher prices have made their investments less attractive. That has raised questions about whether first-time buyers will step in to fill the void, which experts say is key to a continued recovery.
The homeownership rate peaked, on a seasonally adjusted level, amid the housing boom, at 69.4% in the second quarter of 2004.
(Sources: LA Times and Doctor Housing Bubble)