The U.S. homeownership rate touched a 19-year low due to tighter credit that locked out potential buyers and shifted market trends toward renting.
The proportion of Americans owning their own homes stood at 64.4 percent in the three months through September, compared with 64.7 percent in the second quarter, reported the Census Bureau today. This was the weakest level since the quarter through March 1995.
Tough lending conditions and weak wage growth have prevented most first-time buyers from acquiring their own homes. The proportion of first-time buyers stood at 29 percent in September for the third successive month against an historical median of 40 percent, estimates the National Association of Realtors.
“The homeownership rate hasn’t bottomed yet,” Paul Diggle, a London-based U.S. property economist for Capital Economics Ltd, told Bloomberg News. “Something like 64 percent seems like a reasonable floor. But that floor is now in sight.”
U.S. homeownership rate last hit a record high of 69.2 percent in June 2004. It is now near the median of 64.5 percent recorded from 1965 to 1999.
Meanwhile, U.S. consumer confidence surged this month due to improving job market prospects and declining fuel prices.
The Conference Board’s gauge rose to 94.5 in October, the most since Oct. 2007, compared with 89 in September. U.S. gasoline prices are at a nearly four-year low, while strengthening job market is boosting consumer spending, which accounts for nearly 70 percent of the world’s biggest economy.
Elsewhere, the Commerce Department reported that durable goods orders unexpectedly declined in September due to reduced demand for computers and machinery. The orders fell 1.3 percent after falling 18.3 percent a month earlier. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Jonathan Millet at firstname.lastname@example.org