The homeownership rate declined in the United States from the second quarter of 2011 to the second quarter of 2012. During the same period, the homeownership rate also declined in Colorado and in the Denver-Aurora metro area.
According to data released
on July 27 by the Census Bureau, the national homeownership rate
declined from 65.9 percent during the 2nd quarter of 2011 to 65.5
percent during the second quarter of 2012. During the same period, the
homeownership rate in Colorado fell from 66 percent to 65.2 percent.
In the Denver-Aurora area, the rate fell from 62.9 percent to 62
percent during the same period.
The latest data is
based not on the decennial census, but on quarterly estimates made using
data from the Current Population Survey. Quarterly data at the state
and metro level, using current methods, are only available since 2005.
Extrapolating from several different homeownership measures, it looks
like homeownership peaked near 72 percent in Colorado in 2003 and has
been slowly declining since.
The first graph shows the
homeownership rates for the United States and Colorado since 2005. For
most of the seven years covered in the graph, the homeownership rate in
Colorado is higher than the national rate. During the first quarter of
2010 and the fourth quarter of 2011, however, the Colorado rate dipped
below the national rate. While this does not yet establish a trend, it
does show a significant drop in the Colorado rate compared to the
national rate.As of the second quarter of 2012, the Colorado homeownership rate remains below the national rate.
relative drop in the homeownership rate could be due to several
factors. A decline in homeownership could be due to weakening wages and
household wealth, which has led to more mortgage delinquency and more
foreclosure. However, recent mortgage delinquency data from the
Mortgage Bankers Association and the LPS Mortgage Monitor suggests that
Colorado is actually performing better than most of the nation on
The more likely option would
be that new household formation has been robust in Colorado while new
home purchase activity has not been robust. The addition of a large
number of new renter households at the same time that home purchases
decline could lead to a fairly swift decline in the homeownership rate.
We do know that household formation has continued at surprisingly high
levels in spite of weak job growth with more than 20,000 new household
per year in recent years. At the same time, we know that home purchase
activity continues to decline as a rate of 1 to 3 percent year over
year. We also know that population growth through in-migration added
another 30,000 people to the state during 2010.
short, foreclosure activity has been falling in the state, but new
household formation and in-migration has added a significant number of
new persons and households. This will push down the homeownership rate
if home purchase activity declines.