BOSTON – The homeownership rate in the U.S. declined to the lowest in almost 19 years as rising property prices and mortgage rates held back demand.
The share of Americans who own their homes was 64.8 percent in the first quarter, down from 65.2 percent in the previous three months, the Census Bureau said in a report on Tuesday. The rate is the lowest since the second quarter of 1995, when it was 64.7 percent.
Recovering home prices and mortgage rates that have climbed from near-record lows last May have put real estate out of reach for some would-be buyers. The S&P/Case-Shiller index of values in 20 cities increased 12.9 percent in February from a year earlier after rising 13.2 percent in the 12 months through January, the group said Tuesday.
“The homeownership rate is held back by slow job growth, tight mortgage credit and declining affordability,” Jed Kolko, chief economist of San Francisco-based property-listing service Trulia Inc., said in an interview before the report was released. “We’ll see it stay around this level for some time.”
Sam Zell, chairman of apartment landlord Equity Residential, said Monday that the rate will fall to as low as 55 percent because more Americans are choosing to rent as they postpone getting married and having children. As of 2010, about 54 percent of adults were married, down from 57 percent a decade earlier, according to Census Bureau data.
“The deferral of marriage has such a staggering impact on real estate and I just don’t think people focus on it,” Zell, 72, said at the Milken Institute Global Conference in Beverly Hills, Calif. “I don’t think the multifamily market has ever had a better set of future demographics.”
The U.S. homeownership rate for all Americans peaked at 69.2 percent in June 2004, according to the Census Bureau.
In the first quarter, blacks had the lowest homeownership rate at 43.3 percent, up from 43.2 percent in the previous three months. The rate for whites decreased to 72.9 percent from 73.4 percent in the fourth quarter.