The rate of homeownership is the latest casualty in the nation's economic crunch.

A one-two combination -- a housing hangover and the mortgage meltdown -- dropped the rate of homeownership by its largest ever one-year decline.

The U.S. Census Bureau said compared to one year ago, the fourth quarter 2007 rate of 67.8 percent represents the largest annual decline in the rate of homeownership since the bureau began tracking the rate in 1965.

The West was hit hardest, where the rate was down to 62.7 percent; followed by the Northeast at 64.6 percent; the South at 70 percent; and the Midwest, 71.7 percent.

The national fourth quarter rate is also as low as its been since the first quarter of 2002. The rate of homeownership peaked at 69.2 percent in the second quarter of 2004, but has been edging down ever since.

Tight mortgage money conditions makes it tough to land the mortgage you need to buy a home, but affordability also remains a big factor.

A recent Center for Housing Policy report found that in 2007 home prices declined in more than three quarters of the 201 metro areas it studied. However, police, firemen, teachers and other community workers still can't afford the median priced home in their community.

Some 40 communities have home prices that require more income to buy in 2007, than in 2006. In Birmingham, AL home buyers need 18.95 percent more income to buy a home in 2007 than in 2006, according to the Census.

Unaffordable home prices linger from the last housing boom when home prices skyrocketed, following ever lower interest rates and easy-qualifying mortgages. First timers joined growing numbers of speculators, move-up buyers and second home buyers. A record numbers of buyers created an unprecedented boom in demand.

Not only have homes become unaffordable to buy, they've also become unaffordable to keep as mortgage interest rates reset, creating higher monthly mortgage payments. A higher mortgage bill has more than a million homeowners into foreclosure, a short sale or other form of homeownership termination.

An additional 80,000 homes sat vacant and available for sale nationwide in the fourth quarter 2007, compared to a year earlier. The 2.18 million vacant homes for sale in the fourth quarter matched a record set in early 2007.

With talk of a recession, the trend is for more terminated homeownerships and greater supplies of homes on the market.

That could mean some bargain basement discounts for some buyers. But if your homeownership is in jeopardy, talk to your lender, a financial counselor or other professional advisor who can help you keep your home.

Published: February 5, 2008

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.