The homeownership rate fell to the lowest in more than 19 years as the market shifted toward renting and tight credit blocked some potential buyers.
The share of Americans who own their homes was 64.4 percent in the third quarter, down from 64.7 percent in the previous three months, the Census Bureau said in a report Tuesday. The rate was at the lowest level since the first quarter of 1995.
Entry-level buyers have been held back by stringent mortgage standards and slow wage growth. The share of first-time buyers was 29 percent in September for the third straight month, compared with about 40 percent historically, according to the National Association of Realtors said.
“The homeownership rate hasn’t bottomed yet,” Paul Diggle, U.S. property economist for Capital Economics Ltd. in London, said in a telephone interview. “Something like 64 percent seems like a reasonable floor. But that floor is now in sight.”
The homeownership rate peaked at 69.2 percent in June 2004 and is close to the average of 64.5 percent from 1965 to 1999, data compiled by Bloomberg show.
The market since the latest recession has shifted toward rentals as millions of homeowners lost properties to foreclosure and potential buyers couldn’t afford to own a home or had trouble qualifying for loans. Demand for rentals sent leasing costs to records in some cities, spurred an apartment-construction boom and created a new industry of single-family landlords.
The vacancy rate for rental homes was 7.4 percent in the three months through September, the lowest level since the first quarter of 1995, the Census Bureau reported Tuesday. The rate was down from 8.3 percent a year earlier and 7.5 percent in the second quarter.
The homeowner vacancy rate, the share of properties empty and for sale, fell to 1.8 percent in the third quarter from 1.9 percent a year earlier and in the previous three months.
The number of owner-occupied homes dropped to 74.2 million in the third quarter from 74.9 million a year earlier, according to the report. Renter-occupied properties increased to 41.1 million from 39.9 million.