By: Mark Lieberman, Five Star Institute Economist
The number of households owning homes rose to 75,209,000 in the fourth quarter, up from 75,076,000 in the third, but down from 75,315,000 a year ago, the Census Bureau reported Tuesday.
At the same time, the nation’s homeownership rate (seasonally adjusted) dipped to 65.4 percent in the fourth quarter from 65.5 percent in the third quarter.
At 65.4 percent—the same level as the first quarter—the homeownership rate is at its lowest level since the first quarter of 1997 when the rate was also 65.4 percent. The homeownership rate peaked at 69.2 percent in Q2 2004. The rate measures the proportion of households owning their primary residence, computed by dividing the number of household that are occupied by owners by the total number of occupied homes.
The Census Bureau also reported the homeowner vacancy rate remained at 1.9 percent in the fourth quarter, the lowest level since Q3 2005. The homeowner vacancy rate is the proportion of the homeowner inventory that is vacant for sale.
The rental vacancy rate in the fourth quarter ticked up to 8.7 percent from 8.6 percent in Q3, but fell from 9.4 percent in Q4 2011.
The number of housing units for sale in the fourth quarter, Census reported, was 1,498,000, down from 1,783,000 in Q4 2011, confirming assertions by the National Association of Realtors of weak inventories.
The number of housing units held off the market in the fourth quarter was 7,299,000, up from 7,190,000 in third quarter and from 7,122,000 a year ago.
The stagnant homeownership rate combined with a decline in the number of units held off the market suggests opportunities for home sales. At the same time, the profile of homeowners, by age, is changing.
The homeownership rate for older Americans—65 and over—dipped in the fourth quarter to 80.7 percent from 81.4 percent in the second, the lowest rate in three years. The homeownership rate for those under 35 rose to 37.1 percent in the fourth quarter, the highest level in a year after falling for three straight quarters. The homeownership rate for those under 35 was as high as 43 percent in Q3 2006.
According to the quarterly report, the number of housing units in the fourth quarter was 132,961,000, up from 132,839,000 in the third quarter, which is an increase of 122,000 from the quarter and 486,000 in the last year. According to the Census Bureau, 17,927,000 units were vacant, down from 18,145,000 in the third quarter and from 18,389,000 a year earlier.
The highest homeownership rate in the fourth quarter was in the Midwest—69.7 percent, up from 69.6 percent in the third quarter. The homeownership rate in the West fell to 59.5 percent in the fourth quarter from 60.1 percent in the third quarter. The homeownership rate in the South rose to 67 percent in the fourth quarter from 66.9 percent in the third. The homeownership rate in the Northeast was unchanged at 63.9 percent.
The median asking sale price for a vacant home rose to $137,700 in the fourth quarter from $137,000 in the third and from $133,800 one year earlier.
Hear Mark Lieberman Friday on P.O.T.U.S. radio, Sirius-XM 124, at 8:45 am and again at 11:45 am eastern time.
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