Home Vacancies Rise as U.S. Ownership Falls to Lowest in Decade
Bloomberg (Link) - Kathleen M. Howley (July 27, 2010)
About 18.9 million homes in the U.S. stood empty during the second quarter as surging foreclosures helped push ownership to the lowest level in a decade.
The number of vacant properties, including foreclosures, residences for sale and vacation homes, rose from 18.6 million in the year-earlier quarter, the U.S. Census Bureau said in a report today. The ownership rate, meaning households that own their own residence, was 66.9 percent, the lowest since 1999.
Lenders are accelerating foreclosures as borrowers fall behind in mortgage payments after the worst housing crash since the Great Depression. A record 269,962 U.S. homes were seized in the second quarter, according to RealtyTrac Inc. Foreclosures probably will top 1 million this year, the Irvine, California- based data company said in a July 15 report.
�There are a lot of people losing their homes and either moving in with family or renting places to live,� said Patrick Newport, an economist with IHS Global Insight in Lexington, Massachusetts. �Foreclosures are still going up.�
The share of homes empty and for sale, known as the vacancy rate, was 2.5 percent, matching the year-earlier period and down from 2.6 percent in the first quarter, the Census Bureau said. The homeownership rate fell from 67.1 percent in the first quarter, the third straight decline. The rate reached a record high of 69.2 percent in the second and fourth quarters of 2004.
Foreclosures are included in a part of the Census Bureau report that also tracks vacant properties under renovation or tied up in legal proceedings. There were 3.7 million such empty homes in the second quarter, up from 3.5 million in the year earlier period, the report said.
Bank seizures could also be counted as vacant properties for sale or rent, or as owner-occupied homes if lenders haven�t yet evicted previous owners, the federal agency said. There were 2 million empty homes for sale in the second quarter, up from 1.9 million a year earlier.
A record 4.6 percent of U.S. mortgages were in foreclosure in the first three months of 2010, according to a May 19 report by the Mortgage Bankers Association. The combined share of foreclosures and home loan delinquencies was 14 percent, or about one in every seven U.S. mortgages.
Demand for homes has slumped since the April expiration of a government tax credit for buyers. The rate of new-home sales last month was the second-lowest on record, behind May, the Commerce Department reported yesterday. Sales of previously owned homes fell 5.1 percent in June, the National Association of Realtors said last week.
The tax benefit, worth as much as $8,000, spurred a 4.9 percent rise in sales last year, the first increase since 2005, according to the Chicago-based National Association of Realtors.
U.S. home prices retreated 13 percent in 2009 to a median of $172,500, following a 9.5 percent drop in 2008, according to the Realtors� association. This year, prices may rise 0.8 percent, the first gain since 2006, according to a forecast on the trade group�s Web site.
The U.S. median home price tumbled 29 percent to an eight- year low of $164,600 in February, according to the Realtors. The median had reached a record high of $230,300 in July 2006.