REAL ESTATE NEWS...U.S. HOMEOWNERSHIP RATE FALLS AGAIN, NEARING A 48-YEAR LOW

The nation’s homeownership rate hit a 48-year low in the second quarter of 2015, and results from the first quarter of 2016 have dashed hopes that the homeownership rate had finally hit a bottom in 2015, as it slid back almost to that level in the first quarter of this year, according to the U.S. Commerce Department.

Making sense of the story

• In the first three months of this year, the rate was at 63.5 percent, not seasonally adjusted. That is down from 63.8 percent in the fourth quarter of 2015.

• When adjusting for seasonality, the homeownership rate in the first quarter also fell slightly to 63.6 percent from 63.7 percent in the fourth quarter of last year.

• Jonathan Smoke, realtor.com®‘s chief economist, commented, “The decline in the homeownership rate is definitely showing signs of bottoming out. Most likely the homeownership rate is going to be stabilizing or even could be rising again in another year or two.”

• The percentage of homeowners was lowest in the West, at just 58.7 percent, according to the report. The region includes super pricey cities like San Francisco, San Jose, and Seattle.

• They were highest in the Midwest, at 68.9 percent, and the South, at 64.8 percent. Homeownership stood at 60.4 percent in the Northeast, according to the report.

• The continued declines in the homeownership rate in part reflect a growing number of renter households. Some 363,000 new renter households were formed in the first quarter compared with the same time last year, about twice as many as the 177,000 new owner households.

• Troublingly, this was the second consecutive quarter when the number of new households formed was anemic, with the data showing just over 540,000 new households formed in total in the first quarter. In the third quarter of 2015, the number of renter households alone increased by 1.3 million.