Sixty-two percent of Americans own a home, which is the lowest percentage in more than a decade, according to a new Gallup poll. Home ownership rates soared to 73 percent during the housing boom years in 2006 and 2007 but since that time have continued to drop.
A flood of foreclosures has wreaked havoc in many communities in recent years, forcing some former home owners to become renters while also pulling overall home prices down leading to more underwater home owners. The mix of fallen home values and record low interest rates, however, has pushed housing affordability at record levels, making the average house more affordable to the average family.
So while the home ownership rate has fallen in recent years, Americans haven’t lost their thirst for home ownership.
Seventy-percent percent of Americans surveyed in the recent Gallup poll say that now is a “good time” to buy a house, which is up from 53 percent in 2008.
While more view home buying as attractive nowadays, some potential buyers are still being kept on the sidelines due to more stringent lending standards by banks in recent years.
“Potential home buyers can take advantage of today’s low mortgage interest rates only if they can meet significantly more stringent down payment and underwriting standards than was the case prior to the financial crisis,” writes Dennis Jacobe, Gallup’s chief economist, wrote about the survey results.
The U.S. Census, which also tracks the home ownership rate, has calculated that the home ownership rate reached its highest point in 2004 at 69.2 percent and dropped to 66.4 percent by the end of 2011.
More Americans Expect Local House Prices to Increase Than Decrease
Americans are much more positive about the direction of housing prices this year than they were last year. They are significantly more likely to expect the average price of houses in their area to increase over the next 12 months than to decrease, 33% vs. 23%. Last year, Americans were about evenly split, 28% to 30%.
Today’s housing price expectations differ sharply from those during the housing price boom. In 2005, 70% of Americans expected house prices in their area to increase, while 5% expected them to decrease. Expectations moderated as prices hit record levels in 2006-2007. Expectations became more negative during the recession and financial crisis. In 2010, price expectations were similar to those anticipated today.
SOURCE: Real Estate Today, Gallup