The U.S. homeownership rate climbed from the lowest level in 18 years, signaling that the real estate rebound is drawing in more buyers.
The share of Americans who own their homes was 65.3% in the third quarter, up from 65% in the previous three months, the Census Bureau reported today. The prior level was the lowest since the third quarter of 1995.
Rising real estate values are removing negative equity, helping homeowners avoid foreclosure, while also luring would-be purchasers into the market before prices and mortgage rates go higher. The pool of eligible buyers is expanding as U.S. employment improves and families who lost properties during the recession repair their credit and seek another chance at owning.
Americans whose properties were repossessed were once “homeowners by choice and now they are renters by chance,” Richard Smith, chief executive officer of Realogy Holdings Corp., owner of brokerage brands Coldwell Banker and Century 21, said in a telephone interview yesterday. “They will repair their credit and be back in the market as homebuyers. We don’t grow up in the country aspiring to be renters. We aspire to be owners.”
Home prices jumped 12% in September from a year earlier, the 19th straight annual increase, Irvine, California-based CoreLogic Inc. said today.
Minorities and young people are among the groups with the sharpest declines in homeownership since the crash. In the third quarter, the rate for blacks rose to 43.1% from 42.9% the previous quarter, Census Bureau data show. The rate for whites was unchanged at 73.3%.
The increase in the national homeownership rate was the first in a year. The measure peaked at 69.2% in 2004.