Homeownership rate declines WASHINGTON – Feb. 3, 2010 – The U.S. homeownership rate hit a nearly 10-year low in the fourth quarter of 2009, falling to 67.3 percent from a record high of 69 percent in 2004, according to the Commerce Department.

Regionally, the largest decrease was reported in the South, falling to 69.1 percent from 69.8 percent the prior year.

The homeownership rate started to decline in 2006 as mortgage payments became a problem for millions of borrowers and sparked an increase in foreclosures. The federal homebuyer tax credit, along with low property prices and mortgage rates, rejuvenated sales in 2009, with independent housing economist Thomas Lawler indicating that the homeownership rate would have tumbled more without the tax credit. However, rising unemployment and stricter underwriting standards are putting a damper on the housing market, despite a recent report from the National Association of Realtors that pending sales climbed 1 percent in December.

“You can do all kinds of things to get people into a house, which we did; the real problem is making it so they can stay there,” says Weiss Research Inc. real estate and interest rate analyst Mike Larson.

Source: Wall Street Journal (02/03/10) P. A2; Murray, Sara; Bater, Jeff

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