The Census Bureau recently published their second quarter report on residential vacancies and homeownership rates which showed that the homeownership rate slipped from 68.1% from last year to 67.4% this year.
While the year over year decline in homeownership rate should not come as much of a surprise considering the number of Americans that are losing their home to foreclosure, what remains open for debate is how much farther the homeownership rate could fall.
Historically, prior to the housing frenzy that started in the late 1990's, the homeownership rate has ranged from 63-64%. The rate peaked at 69.2% during the 4Q of 2004.
The concern is that with the foreclosure rate surging 33% year over year (source: RealtyTrac), and with the homeownership rate deteriorating, the demand for real estate will continue to be outpaced by the supply of homes. But rather than provide incentives for Americans to invest in real estate and absorb the excess supply of homes, Washington is continuing to pursue a failed homeownership policy.