Friday, November 15, 2013

Homeownership rate falls to 8-year low in metro Denver during third quarter

According to the Census Bureau, the homeownership rate in metro Denver during the third quarter of 2013 fell to the lowest level recorded in any quarter since the bureau began tracking quarterly homeownership rates in 2005.

The decline in the rate was likely due not so much to households losing their homes (foreclosures have declined significantly in recent years) as it is due to a large number of new renters moving to the metro Denver area, and to fewer households buying homes, either by choice, or because they are unable.

The first graph shows the homeownership rate for metro Denver, Colorado, and the US:

We can see that in all three areas there has been a general decline since 2005.  While the metro Denver rate continued to decline, both the Colorado rate and the US rate inched up during the third quarter. All three areas were down when compared to the same quarter of last year. 

The homeownership rates for the third quarter were:
Metro Denver 60.4 percent
US 65.3 percent
Colorado 64.9 percent 

During the same period of last year, the rates were:
Metro Denver 61.8 percent
US 65.5 percent
Colorado 64.9 percent 

The second graph shows annual foreclosure rates back to 1984 for Colorado. We can see that overall, homeownership rates have been declining in both the US and Colorado for the past ten years. 

In recent years, growing numbers of renters, rising mortgage rates, lackluster wage growth, and rising home prices have all contributed to ongoing declines in the homeownership rate.