The rate of home ownership slipped to levels not seen in more than three years as a record-level of empty homes -- many listings-cum-rentals -- has piled up across the nation -- two more signs of an anemic housing market.
"Housing Vacancies And Homeownership", a U.S. Census Bureau report reveals the rate of home ownership in the first quarter this year slipped to 68.4 percent -- a level not seen since the third quarter of 2003.
At that time, the rate of homeownership was on it's way to a record high 69.2 percent, set in the second quarter of 2004. The rate hit 69.2 again during the fourth quarter in 2004, but has been slipping since, according to the bureau.
Experts blame the falling rate on the housing market's post-boom bailout forced on some home owners saddled with risky mortgages and taken by others, often investors moving onto greener pastures.
This spring, the Center For Responsible Lending in testimony before the U.S. House Committee on Financial Services (Subcommittee on Financial Institutions and Consumer Credit), documented how subprime loan foreclosures were slicing through the ranks of home owners.
The subprime shiv has also cut into the risky loan business as lenders tightened underwriting standards on nontraditional mortgages as well as subprimes, further exacerbating home ownership levels.
Housing costs haven't come back down to earth after skyrocketing in many regions for years and that's locking out would be buyers who no longer have the financial leverage to get in.
The fallout is spreading to the rental market where owners and investors who can't sell are padding rental inventories with their empty homes.
In the first quarter this year, there was a record 2.18 million unoccupied homes for sale, up 4 percent from record levels in the last quarter 2006, and up a whopping 38 percent from a year earlier.
The report says 2.8 percent of all residential properties were vacant, up from 2.7 percent a quarter earlier and from 2.1 percent from a year ago.
It was the eighth straight quarter of increasing home vacancies and the highest percentage of vacant properties since the bureau began compiling the numbers in 1956.
More empty properties can further compound market woes as motivated sellers lower prices and impact other prices in the same market.
The second home market is certainly taking it on the chin, as sales plummeted 18.56 percent last year according to the National Association of Realtors' annual "Investment and Vacation Home Buyers Survey".
Blame the speculators.
Investment home sales took a nose dive, losing market share and falling 28.9 percent in 2006 compared with 2005 sales. However, vacation home sales rose by 4.7 percent during the same period and grabbed a greater portion of market share.
David Lereah, NAR's chief economist, in a prepared statement, speculated investors were fleeing from condos and pricier markets while vacation home buyers picked over the spoils in less expensive markets.
According to online vacation rental company, HomeAway.com, "Research shows that while many vacation home buyers do not initially intend to rent their second home, they choose to do so after a year or so of ownership, discovering they do not use the home as often as intended and it is more expensive than anticipated."
The glut of empty unsold homes -- first, seconds and investments -- is also spilling over into a recovering rental market.
A benchmark study of landlords by CompleteLandlord.com discovered that nearly one in five landlords didn't set out to be one when they purchased their property.
The National Association of Residential Property Managers says its membership has swelled by 20 percent in the past year.
The Census report said rental vacancy rates rose to 10.1 percent in the first quarter this year, up from 9.5 percent a year ago.
Hardest hit were the suburbs where the rental vacancy rate rose from 8.7 percent to 10.1 percent, during the same period, and the South, where vacancies rose from 10.9 percent to 13.1 percent from the first quarter 2006 to 2007.
