US homeownership rate lowest in 20 years

US homeownership rate lowest in 20 years

HomeUSEconomy Fri Jan 30, 2015 6:59PM

Homeownership in the United States fell to a 20-year low in 2014 despite some improvements in economic activity.

The share of Americans who own their own homes was 64 percent in the fourth quarter of last year, the lowest level since 1994, the US Commerce Department said on Thursday.

US homeownership dropped across all four regions of the country in the fourth quarter, with declines noticeable in almost all age groups, the Commerce Department said.

The homeownership rate, which peaked at 69.4 percent in 2004, was 64.3 percent in the third quarter of 2013.

The share of American homebuyers making their first purchase dropped in 2014 to the lowest level in nearly three decades, the National Association of Realtors reported last week.

More than 73 percent of white Americans are currently homeowners, according to the US Census Bureau. By comparison, 43 percent of African-Americans and 46 percent of Hispanics own their own homes.

That is a major reason for the vast racial wealth inequality in the US, according to the Pew Research Center.

The wealth of white households was 13 times the median wealth of black households and more than 10 times the wealth of Hispanic households in 2013. By contrast, whites had eight times the wealth of blacks and nine times the wealth of Hispanics in 2010.

African-American and Hispanic homeowners suffered disproportionate losses in the 2008 housing crisis, as “predatory lending” wiped out the few assets they owned.

“The whole economy’s fate will be affected by how well we reverse the homeownership gap,” Mike Calhoun, executive director of the Center for Responsible Lending said.

“Incomes just aren’t rising, they are not keeping up with the housing market,” says Kristen Komara, vice president of financial wellness at Resurrection Project in Chicago. “I have a lot of folks who ask, ‘Can I get a brand-new rehabbed house for $60,000?’ Nowhere is that possible.”

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