Real Economics: Housing

Harvard University

Homeownership rates are now at 20-year lows: Just 63.5% of U.S. houses owned last year, after peaking at 69% in 2004. They are now comparable to levels last seen in 1993.

The homeownership rate for minorities continues to lag: It peaked at 51.3% in 2004, and has now fallen to 47.2%. Of all minority groups, African Americans have the lowest rate of homeownership, just 43.8%.

A key factor in the decline in homeownership is the “steady erosion” of household incomes since the recession began.

Restricted access to financing has also kept people away from the housing market: For those with credit scores between 660 and 720, home-purchase loans decreased 37%, while the decrease for those with higher scores was just 9%.




New-property sales rose just 2% over last year, a sharp drop from the 17% increase over the previous period. The current number, 437,000 units, is 30% below historical averages in the 1970s, ’80s, and ’90s.

Existing home sales dropped 2.9% from 2013 to 2014, to 4.9 million units. However, there were more traditional sales and fewer distress-related sales — 10% fewer cash sales and 15% fewer bank-owned properties.

the U.S. rental market is booming, with 770,000 additional rental households added yearly since 2004.