The national home ownership rate fell to 66.6% in 2008, its lowest rate in six years. The home ownership rate peaked at 67.3% in 2006. That data comes from the American Community Survey, which was released Monday by the U.S. Census Bureau.
The survey broke down the decline in home ownership statistics by race. The decline was 0.88% for blacks to 45.6% home ownership level. Hispanics experienced a similar decline, down 0.80% to 49.1%. Homeownership for Asians fell the largest percentage in the survey dropping 1.24% last year to 59.4%. And, Caucasians suffered the smallest decline, down 0.40% to 73.4%.
So, to put the numbers into context, home ownership is down only 0.8% from its peak that was reached in 2006. According to a Realtor.com survey, 72% of American adults surveyed reduced their spending in the past year to help pay their mortgage or rent and 52% fear that they or someone they know will face foreclosure in the next twelve months. In fact, 12% of homes with mortgages in Florida are in some state of the foreclosure process, and more than 1.5 million homes have received foreclosure notices in the first half of 2009. One out of every 84 households is in foreclosure proceedings.
So, having said all of these horrible statistics about home ownership recently, why is America still so close to the home ownership peak value of 2006? Less than 1% of the number of home owners has dropped since the crisis started. How can this be right?
Here are two possibilities. First-time buyers are entering the home buyers market in greater numbers than ever before. Another survey recently found that first-time buyers accounted for 43% of all home sales in the second quarter of 2009. Another hypothesis is that many of the homes foreclosed on were second homes and investment properties. Lets face it…the era of home flipping is over.
The home owner statistics do not really convey the perception of a massive decline in home ownership that is embedded in the American psyche thanks to the media. The American Dream is alive and well, banks are still lending, and owning your own home remains the world’s best way to build wealth.