Homeownership rates in the United States declined to their lowest level in 20 years in the third quarter of 2014, according to the latest U.S. Census Bureau report.
According to the report, homeownership in the country retreated to 64.3 percent, falling from the 64.8 percent recorded in the previous quarter. The figure is 0.9 percent below last year's number.
The report also highlighted that with the fall in homeownership, there has been a significant drop in vacancy rates of rental units as well. Vacancy rates fell 7.4 percent for the three months ended September, reaching the lowest since level since the first quarter of 1995. The rates are below the 8.3 percent recorded last year and 7.5 percent of the previous quarter.
A certain demographic change was also underscored in the report. The number of adult homeowners, aged between 35 and 44 years, has dwindled to just 59 percent. The figure was 68 percent in the first quarter of 2008.
Below is a chart that shows the state of homeownership in the United States since 1995.
Experts attribute the fall in homeownership to tight credit standards and the lack of supply. Lending standards have been supremely high throughout the initial months of 2014, which has hampered home buying activity. Also, buyers have been cautious about taking the property decision due to the economic uncertainty and the concerns revolving around the jobs and wages sector.
The U.S. economy picked up steam after the summer. Lending standards have now started to loosen and supply has also improved. Notwithstanding seasonal trends, the growth curve of the housing market has been heading in the right direction. A recent report by Zillow showed that the real estate market is now returning to normal.
"What a difference a year makes. At this time last year, we were worrying about a number of frothy markets that looked like they could be on the edge of another housing bubble, places where homes were appreciating at more than 20 percent per year and where buyers' heads were spinning just trying to keep up," Stan Humphries, chief economist at Zillow, told CNBC in a previous interview adding that those areas are now well out of the red.
"Home values should continue to grow, but that growth will increasingly be driven by traditional market fundamentals like household formation and job growth, and less by artificial stimulants like decreased supply and widespread investor demand," he added.
The Wall Street Journal has a series of updated charts that have been gauging the housing recovery and its indicators. Take a look at those graphs here.
