November 14th, 2011 3:48 PM by Lehel S.
After falling to a 13-year low during the second quarter, the homeownership rate posted a highly unexpected rise in the third quarter, according to a Census Bureau report released Wednesday.
With foreclosures forcing homeowners out of their homes and buyers waiting on the sidelines as home values declined, the homeownership rate has been on the decline for quite some time. In fact, according to Bloomberg, the third quarter rise is the first in two years.
However, the 0.4 percent increase, which brought the homeownership rate to 66.3 percent for the third quarter, was not enough to post an annual increase.
The current homeownership rate remains 0.6 percent below the rate recorded in the third quarter of 2010.
Furthermore, according to the Census report, when the current rate is seasonally adjusted – which brings it to 66.1 percent – it is “not statistically different from the rate last quarter” – an even 66 percent.
Homeowner vacancy rates fell 0.1 percent in the third quarter arriving at 2.4 percent.
At the same time, rental vacancies rose 0.6 percent arriving at 9.8 percent.
Despite this shift, Capital Economics says in response to the Census findings, “The modest increase in the rental vacancy rate in the third quarter does little to alter our view that rental yields will soon rise above 5.5%, comfortably beating the yields available on Treasuries and equities.”
“Meanwhile, the homeownership rate remains at a level that suggests America’s love-affair with housing is still on the rocks,” Capital Economics adds.
About 85.8 percent of housing units were occupied in the third quarter.
The region with the highest homeownership rate was the Midwest with a rate of 70.3 percent, while the lowest homeownership rate was seen in the West at 60.7 percent.
The Northeast and South feel in between at 63.7 percent and 68.4 percent respectively.
At 76.1 percent, West Virginia had the highest homeownership rate. The state was followed closely by Mississippi with a 70 percent homeownership rate.
The lowest homeownership rate was seen in the District of Columbia, where the rate for the quarter was 44.3 percent. New York followed with 54.4 percent.
Nevada and California – states hard-hit by the housing crisis – were also in the bottom five with homeownership rates of 55.3 percent and 55.9 percent respectively.