Home sales have finally begun to slow after a red-hot summer that saw prices soaring so quickly that some began to worry about the return of a housing bubble.
But despite the recent housing gains, the country’s homeownership rate has continued to fall. Just 65 percent of households in the first half of this year owned their homes, the lowest level in 18 years, and a significant decline from the record-high of more than 69 percent reached at the height of the housing boom in 2004.
Although buying a home is 35 percent cheaper than renting in the long term, an increasing percentage of Americans are choosing to sign a lease rather than a deed. Experts predict homeownership will fall even more in the next few years.
“We could see levels we haven’t seen since the 1960s,” Patrick Newport says.
Although homeownership rates are likely to rebound a few years from now, the gains will be slow, and housing economists don’t see them ever again reaching the unhealthy “bubble” levels hit in the early 2000s. Here’s why.
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