Homeownership rates nationwide grew in the third quarter to 63.5 percent, after hitting a 51-year low of 62.9 percent in the prior quarter, the Census Bureau said Thursday.
That could be a sign the decade-long decline in homeownership is at a turning point. In 2005, the homeownership rate hovered at 69 percent; in 2006 it began dropping steeply and has been on a downward slope ever since, with some fluctuation.
“I think the long slide, which began with the housing bust back 10 years ago, is over,” Mark Zandi, chief economist at Moody’s analytics told the Wall Street Journal.
But Joseph Lavorgna, chief U.S. economist at Deutsche Bank disagrees, “When you have something that has essentially been in decline for 10 years, one quarter isn’t enough to tell me that we are even stabilizing.”
There is reason to be skeptical. This quarter’s rate of 63.5 percent is lower than where it was a year ago, at 63.7 percent, although the difference is not statistically significant. In addition, the seasonally adjusted rates of 63.4 percent for the third quarter, and 63.1 percent for the second, are also not considered statistically significant.
Nevertheless, the Census Bureau did introduce another cause for optimism. New households were up 1.1 million in the third quarter from 944,000 in the second. About half of the new households were owners rather than renters. [WSJ] — Chava Gourarie