Wednesday, November 3, 2010

Homeownership rate falls in US, Colorado

The Census Bureau this week released its quarterly estimate of the homeownership rate in Colorado. According to the report:
The homeownership rate of 66.9 percent was 0.7 percentage points (+/-0.4%) lower than the third quarter 2009 rate (67.6 percent) and approximately the same as the rate last quarter (also 66.9 percent).

The rate is at its lowest level since the second quarter of 1999.

The Census Bureau does not provide quarterly data on homeownership at the state level, so to provide some context, we need to make comparisons using annual numbers.

Looking at the annual data, we see that the current trend in quarterly data matches the trend in annual numbers. The 2009 homeownership rate, the most recent available, shows a rate of 67.4 percent for the United States. This compares to a homeownership rate of 68.4 percent in Colorado. The graph below shows that the homeownership rate in the Colorado has exceeded the national rate since 1999.

Colorado's homeownership rate fell well under the national rate during the Colorado recession of the late 1980s, and did not return to match the national rate until the mid 1990s.

Homeownership peaked in Colorado at 71.3 percent during 2003 in Colorado and it peaked at 69.0 percent during 2004 in the United States.

Since then, both the national and the Colorado rate have fallen to 2000 levels. In 2000, the national homeownership rate was 67.4 percent and the Colorado rate was 68.3 percent.

The homeownership rate is likely to continue falling in the United State and in Colorado as long as job growth stalls. The availability of home financing was at historical highs during most of the past decade, and it is unlikely that these conditions will be repeated in the near future.

Homeownership rates near 70 percent are historically unusual.