HOMEOWNERSHIP RATE IS DECLINING
In the 40-year period between 1955 and 1995, the homeownership rate in America averaged 61%, meaning that 61% of households owned and 39% rented. In the 10-year period between 1995 and 2005, however, the national homeownership rate surged to 69%, meaning just 31% of all households were renting.
Good time to be a landlord? Uh, no.
As you know, the great housing boom in America started in the mid 1990s and ended in 2006. During this time, underwriting guidelines became looser and looser, as lenders became immune to risk because rising values made everyone seem creditworthy.
Now, as the housing market pushes back against 10 years of gains, the homeownership rate is on the decline.
In 2006, the homeownership rate retreated to 68%. Last year, it went to 67%. Today, many analysts predict that by the time our national foreclosure crisis is over, homeowernship rates will be back in line with historical averages.
In the past two years, nearly 80,000 Colorado households have been converted from owners to renters through the foreclosure process. Single family rental homes currently have a vacancy rate of 2.7% in the Denver Metro area. Rents are very much on the rise.
With an unemployment rate a full percent below the national average and very little new construction on the horizon, the demand for quality rental housing will only intensify in the years ahead.
It's a landlord's market, plain and simple.
