House foreclosures are putting a downward pressure on home ownership and home construction, based on data from the Census Bureau and Commerce Department.
The home ownership rate in the country hit a ten-year low in the fourth quarter last year when it dropped to 67.2 percent of all Americans, a decrease from 67.6 percent in the third quarter and from 67.5 percent in the fourth quarter of 2008.
Home ownership has been declining since 2006, when the early signs of the housing crisis showed. According to Weiss Research analyst Mike Larson, it has been easy putting people into homes, but the difficult task is how to make them keep their homes.
The Midwest has the highest home ownership rate, which is 71.3 percent. The South is next, with a rate of 69.1 percent. These are the regions considered relatively affordable in housing. The lowest rates are found in the West and the Northeast, where house prices are typically higher. The rates in the West and the Northeast are 62.3 percent and 63.9 percent, respectively.
The biggest homeownership rate declines are in the South, where the rate fell by 0.7 point, and in Western states like California and Nevada, where the rate fell by 0.4 point.
Additionally, the percentage of unoccupied houses in the U.S. increased in the final quarter in 2009 to 2.7 percent, compared to 2.6 percent the preceding quarter.
House foreclosures also battered new home construction nationwide. In December last year, construction of new houses and apartments dropped by 4 percent to an adjusted rate of 557,000 from an adjusted rate of 580,000 the previous month.
The actual December rate was below the 580,000 units predicted by economists interviewed by Thomson Reuters, as construction activity declined in the Midwest and Northeast by a substantial 19 percent. It is only in the South where construction rose, climbing up by more than three percent. Construction dropped in the West by one percent.
Aside from the price pressure of foreclosures, builders also lack financing for their projects. Lenders have tightened their lending activities since the last months of 2008.
Nevertheless, the number of building permits has climbed up in December to an adjusted rate of 653,000, the highest number reached since October 2000. Home permits have risen in the last two months of 2009, raising hopes of more jobs in the construction sector and the start of final recovery from house foreclosures.
Author Resource:-> Original Post: House Foreclosures Impact Home Ownership, Home Construction on Foreclosure-Support.com.
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