Homeownership in the United States held near 18-year lows in the third quarter, suggesting that the housing market was still struggling to overcome challenges brought on by the recession. The seasonally adjusted homeownership rate, the share of households owning a home, held at 65.1 percent, the lowest since the fourth quarter of 1995, the Commerce Department said on Tuesday.
The rate peaked at 69.4 percent in 2004. Stubbornly high unemployment and stringent lending practices by financial institutions have now put the American dream of owning a home out of the reach of many residents.
Although the unemployment rate has declined significantly from a peak of 10 percent in October 2009, it remains at an uncomfortably high 7.2 percent. About 21.5 million people are either unemployed, working only part-time despite wanting full-time work, or want a job but have given up the search. Investors, wanting to take advantage of the rising demand for rental accommodation, have partially driven the housing recovery. But the home sales pace has slowed in recent months as potential buyers balk at higher mortgage rates.
With the share of first-time home buyers hovering well below levels that economists and real estate professionals consider ideal, there are concerns the higher borrowing costs could hold the homeownership rate near current lows.
The residential rental vacancy rate rose a tenth of a percentage point to 8.3 percent in the third quarter. Despite the increase, it was well below a peak of 11.1 percent in 2009.
In the third quarter, the median asking rent was little changed at $736.
Homeownership was high among people 65 years and older, but remained low in the under 35 years age group.