Monday, October 10, 2011

Update: The homeownership rate in Colorado

Last week, the Census Bureau released some new numbers showing that the national homeownership rate had fallen to 65.1 percent during 2010. This is down from a high of nearly 70 percent.

The Associated Press noted that the recent drop in the homeownership rate was "biggest drop since the Great Depression." The magnitude of the drop reflects the extended period of high unemployment and declining home values that has persisted since late 2008.

What does this mean for homeownership rates locally? Below, we look at a couple of different measures.

First, we can look at the regional and national homeownership rates as provided quarterly by the Census Bureau. The quarterly numbers are always a little different form the annual numbers, but the general trend is the same.

According to the Census Bureau’s quarterly estimates of the homeownership rate (found here), the homeownership rate peaked in the US at 69.2 percent during the fourth quarter of 2004. This then began to slowly drop, and then the decline began to accelerate after 2007. The homeownership rate has now fallen about 5 percent from the peak, and was 65.9 percent during the second quarter of 2011.

In the Western US, the homeownership rate is consistently lower, but the same overall trend holds. Regionally, the homeownership rate is down from 2006's 3rd quarter peak of 65.3 percent, and was down to 60.3 percent during the second quarter of this year. Proportionally, the homeownership rate in the West rose more than the national during the boom, and subsequently fell more than the nation after 2007. In the west, the homeownership rate has fallen 7.7 percent since the peak.

The graph shows the relative trends of the national and regional homeownership rates.

Regionally, the homeownership rate tends to be below the national rate, but in Colorado specifically, since 1999, the homeownership rate has tended to be above the national rate.

Quarterly data is not available at the state level, so the second graph shows annual homeownership numbers for both Colorado and the nation. According to the Census Bureau's estimates, the national homeownership rate fell to 66.9 percent during 2010. Nate that this is a higher number than the 2010 numbers from the decennial census. In other words, the estimates showed higher homeownership rates than the census itself. So, the homeowership rate in recent estimates was probably a little lower than was estimated.

The overall trends probably hold true, however, and Colorado's homeownership rate is probably still slightly above the national rate. The most recent estimate for 2010 places it at 68.5 percent. The new census data puts the Colorado homeownership rate at 65.5 percent.

The graph below shows the annual estimates for Colorado and nation. Recent rates are probably slightly above the actual, given recent census data.