U.S. homeownership rates are below 60 percent when delinquent borrowers are discounted, an indication of the country’s move toward a “rentership society,” according to a Morgan Stanley report released yesterday, cited by Bloomberg News.

The national homeownership percentage was 66.4 in March but would be only 59.7 percent without 7.5 million delinquent owners who will likely soon be forced into renting. The lowest rate on record was 62.9 percent in 1965, the first year the census began, Bloomberg said. The highest rate on record was 69.2 percent in 2004.

Mortgage delinquencies, foreclosures and tighter credit are stymieing property buying, Morgan Stanley analyst Oliver Chang said. [more]

National vacancy rates in the third quarter of this year were 10.3 percent for rental housing, a .8 percent year-over-year decrease from 2009, according to data released today by the U.S. Census Bureau. The vacancy rate was 2.5 percent for homeowner housing, a .1 percent year-over-year decrease from 2009, and a .3 percent decrease from last quarter. In the third quarter of 2010, approximately 85.6 percent of housing units in the United States were occupied and 14.4 percent were vacant. Owner-occupied housing made up 57.3 percent of total housing units, while renter-occupied units accounted for 28.3 percent of the inventory. TRD

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While homeownership has long been synonymous with the “American Dream,”
the mortgage crisis and subsequent housing market turmoil have turned
this ideology on its head. In this CNBC
video, Congressman Paul Kanjorski weighs in on whether owning a home
should be the ideal for many families. “It doesn’t fit all people; not
all people are capable of homeownership at this time,” Kanjorski said.
“But in reality, we’ve always found over history [that] homeownership
is probably the best equity builder that our system has had… we want
to make sure we don’t throw the baby out with the bath water.”

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The U.S. homeownership rate slipped to 67.1 percent last quarter, its lowest level since 2000, according a report from the U.S. Census Bureau (see the full report here). Meanwhile, vacancy rates for rentals rose 0.5 percent on a year-over-year basis, and dropped 0.1 percent from the end of 2009. For homeowners, the 2.6 percent vacancy rate during the first quarter was 0.1 lower than both the first and fourth quarters of 2009. Roughly 14.5 percent of all housing units were vacant last quarter. Renter-occupied units comprised 28.1 percent of the country’s total housing stock. TRD [more]

While some potential homebuyers are approaching the market more cautiously, most still view homeownership as the American Dream, according to a public sentiment survey by Fannie Mae. The housing organization found that while around 23 percent of renters plan to delay their plans to buy a home, 70 percent of the survey respondents, who were polled between December 2009 and January 2010, still consider a home to be “one of the safest investments available.” Around 65 percent of respondents also said that they would rather own a home than rent one. Mike Williams, president and CEO of Fannie Mae, said that the data indicates positive public sentiment toward the institution of homeownership. “Despite the recent downturn in the housing sector, Americans continue to value homeownership and think about their homes in ways that go much deeper than the financial investment,” Williams said. TRD

Simply put, values of real estate, stocks, companies, individuals, and most everything were artificially increased by 100 percent or more the first half of this decade primarily due to increases in real estate values from speculation fueled by leverage and debt. The painful result of deleveraging is well under way, as the process of devaluation and riddance of debt continues. Seventy percent of the U.S. gross domestic product is generated by American consumers. I’ve recently heard some pundits say that a “consumer-less recovery” was under way. There is no such thing.

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To rent or buy your home? That was the question on today’s CNBC show, “The Call.” The Real Deal Founder Amir Korangy went head-to-head with Zillow COO Spencer Rascoff, who argued that now is a good time to buy a home, even though he predicts that the market won’t bottom out until next year. “Inventory levels are way up — there are more homes for buyers to choose from — and prices are way down,” Rascoff said. But Korangy sees things differently, pointing out that a down market is an opportunity to be circumspect about your home buying decisions. “I think it’s a great time to scout the properties you’re really interested in,” Korangy said. “They say homeownership is the American dream, but I think that’s as false a claim as Santa Claus … it’s not for everybody.”

The Obama administration plans to use $4.25 billion in economic
stimulus money for the creation of subsidized rental housing units in
cities across the country. The money would pay for both the
construction of new apartment buildings and the refurbishment of
foreclosed homes. An additional $4 billion of the $14 billion that the
Department of Housing and Urban Development received from the federal
stimulus package will go toward repairing the nation’s current public
housing stock. The program marks a drastic shift from former President
George W. Bush’s “ownership society,” the idea that the ultimate goal
for all Americans should be home ownership. But opponents of the Obama
administration’s proposal warn that sometimes rent can be more
expensive than a mortgage. [more]

Federal officials at the Treasury Department are considering a plan
that would allow borrowers who are behind on mortgage payments to avoid
eviction by renting their homes instead. Under the plan proposed by
economist Dean Baker of the Center for Economic Policy Research, a
bankruptcy judge would help determine a fair rent for the property.
Banks would be able to sell the occupied homes, but the lease would
remain in effect even if the ownership changed. Officials are still
figuring out how to replace a loan with a rental lease without
disrupting the overall mortgage market. Two possible methods that are
being considered by government officials are paying cash to
mortgage-service companies to take part in the new program or selling
homes to a third party that would write rental agreements. [more]