It isn’t just new home builders who are realizing that owning a home is becoming a scarce vestige of a prior American dream: even the Census Bureau is coming to the same conclusion.
With homeownership rates dropping, is the American dream fading away?
Recent data released by the government agency found that the national homeownership rate stood at 66.3 percent at the end of 3Q 2011, down nearly half-a-percent from the same period on 2010. The rate marks a steep drop from the nearly 70-percent ownership rate that the country saw during the recent housing boom. Judged by decade, the drop in ownership fell from 66.2 percent in 2000 to 65.1 percent in 2010—the steepest drop since the 4.2 percent slide seen during the Great Depression. It was during that last economic swoon that the lowest home ownership numbers for the nation were seen, with just 43.6 percent of Americans owning a home.
The Census Bureau also noted that variance in homeownership was largely regional, with the lowest rates of homeownership in the beleagured West (60.7 percent), and highest in the Midwest (70.3 percent). Less affected by the housing boom and bust, the Midwest has remained more economically-aloof from recent troubles, and has managed to keep economic equilibrium—a strong contrast to the reeling Western states, where economic malaise and downward pressure on prices has left the region still searching for a housing bottom. The irony for the West is that even as home affordability rises and borrowing rates plummet, that economic instability and the resultant ongoing jitteriness of potential homebuyers has left the markets clamoring for parties to take up excess inventory.
The drop in homeownership rates has also cut along racial and economic lines, with the gap between those who own and those who don’t the widest it has been in decades. White homeownership stands at 73.8 percent as of 3Q 2011, while homeownership among blacks is at 45.6 percent; Hispanics show just 47.6 percent as owners, down substantially from the over 50 percent seen during the boom. The latter group, who tended to concentrate household assets in housing, saw a disproportionate drop in household equity after the housing bust.
Finally, ownership was predictably greater among households who earned more than their area’s median income. More affluent households had an ownership rate of 81.3 percent, while those families making less than area median income had rates of just 51.3 percent—a gap relatively consistent even with the spread during the housing boom.
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