The U.S. Census Bureau reports the homeownership rate was at 66.9 percent in the third quarter of 20910, the lowest level since 1999. The homeownership rate fell from 67.6 percent in the third quarter of 2009. The rate reached a record high of 69.2 percent in the second and fourth quarters of 2004. The effects of the economic downturn cannot overshadow the benefits home buyers can reap in this market, according to a local REALTOR® official.
"The low homeownership rate is clearly a byproduct of the recession, the housing market downturn and foreclosures," said Jeff Bell, president of the Silicon Valley Association of REALTORS®. "Obviously, people are hesitant to make a move because of much uncertainty in the economy."
Although the economy is soft and consumer confidence remains low, Bell points to new data from the National Association of REALTORS®. that shows positive signs for the future. Here are 10 key facts to understand about today's market.
1. The economy is growing, though slowly.
2. The private sector is finally creating some jobs.
3. Consumer confidence remains low, though clearly off bottom.
4. The 30-year mortgage rate is at generational lows.
5. The national median-home price is stabilizing.
6. Other home-price measurements also are showing price stabilization.
7. Home price-to-income ratios have returned to fundamentally justifiable levels.
8. Economists expect price increases in upcoming years
9. Delinquencies are high but recent loan originations are performing well.
10. The long-term path to self reliance may be helped from long-term housing-wealth gains.
"Buying a home can be a life-changing decision and one that many people take seriously, especially in this market. Part of becoming a responsible homeowner is weighing every aspect of the decision before buying, including lifestyle preferences, job and financial situation and affordability," Bell said.
For anyone who's considering buying a home right now, current housing affordability conditions can benefit today's buyers for years to come. Housing affordability has increased recently due to rock bottom mortgage rates. Rates for a 30-year fixed-rate mortgage are hoveringaround 4.4 percent. The average wage rate has made modest gains, as well. Despite the high unemployment rate, the average wage rate rose three percent in 2009 and is up 1.2 percent this year-to-date.
"At current interest rates and median prices, today's affordability conditions are saving buyers thousands of dollars a year," said Bell. "The savings today's buyers are receiving are not a one-time benefit. Buyers with fixed-rate mortgages will save money every year they are living in their home."
In addition to favorable affordability conditions, there have been 763,000 private sector job creations from the beginning of the year to August. Affordability and soft job creation are a move in the right direction for the housing market.
"Of course, jobs must return to the market for many Americans to even consider homeownership," said Bell. "But buyers who have reviewed their finances and believe they are in a secure position to become homeowners have an opportunity to take advantage of affordability conditions in today's market and enjoy the social and financial benefits of homeownership for years to come."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please contact Rose Meily at SILVAR Public Affairs, email , or phone (408) 200-0109.