Homeownership rates fall to 66% in US as downturn nears a bottom

Canadian census data indicates that Canadian home ownership was 68.4% in 2006 - an all time high. I haven't been able to find home ownership rates for subsequent years - but the forclosure and home-abandonment rates in Canada are nowhere near what they've been in the US during the past 5 years.
Indications are that Canada held onto higher ownership rates over the past 5 years and now exceed the rate in the US by anywhere from 1 to 4 percent.
Canada was able to reach record high ownership rates (comparable to the US peak in 2004) without resorting to irresponsible bank lending practices and the subsequent bubble and crash that happened in the US.
The American Dream.
Alive and well -> in Canada...
See also:
http://www.aei.org/article/economics/financial-services/why-canada-avoided-a-mortgage-meltdown / http://dallasdirt.dmagazine.com/?s nadian+home+ownership ====================================================================== http://www.usatoday.com/money/economy/housing/story/2012-01-31/home-prices-ownership/52907436/1?csp=ip
Homeownership rates fall to 66% as downturn nears a bottom By Julie Schmit, USA TODAY Updated 12h 30m ago
Fewer Americans own homes and many of them are continuing to see values decline.
By Charles Buchanan, AP
The U.S. Census Bureau reported Tuesday that the nation's homeownership rate fell to 66% in the fourth quarter, continuing a seven-year drop from a fourth-quarter peak of 69.2% in 2004. At the same time, U.S. home prices fell 1.3% in November from October and were 3.7% below 2010 levels, the Standard & Poor's/Case-Shiller home price index indicates.
Falling homeownership and prices reflect the worst housing downturn since the Great Depression. And while there are signs that the housing industry's downturn may at least be nearing a bottom, the impact of the collapse will be evident for years to come, economists say. As of November, average U.S. home prices were back to mid-2003 levels, S&P says.
"Americans are less keen on homeownership knowing now that prices can fall," says Paul Dales, economist with Capital Economics. Even if people want to own a home, they may not be able to, given the difficulty in getting financing for a mortgage, Dales says. The National Association of Realtors says many purchase contracts appear to be falling through for that reason.
Many economists expect home prices to continue to fall this year and maybe into next year before stabilizing and then showing little or no appreciation for some time. "The trend is down, and there are few, if any, signs in the numbers that a turning point is close at hand," says David Blitzer, chairman of S&P's index committee.
Phoenix was the only city in Case-Shiller's 20-city index where home prices rose in November from October. They were up 0.6%. On a year-over-year basis, only two cities showed rising values. Detroit was up 3.8%, and Washington, D.C., 0.5%, the Case-Shiller data show.
While prices are still falling in most areas, there are signs of increased home sales. Existing home sales rose in December for the third consecutive month, the National Association of Realtors says. And pending home sales, while dropping more than expected in December, were still above levels a year before, NAR says. "Home prices will be the last thing that moves up" after increasing sales and shrinking inventories, Blitzer says.
The homeowner vacancy rate fell again in the fourth quarter, the Census data show, to 2.3% from 2.4% in the third quarter and from 2.7% in the fourth quarter last year. The 2.3% rate is the lowest since early 2006 and "leaves the visible inventory at a level consistent with house prices bottoming out later in the year," Capital Economics says.
The drop in homeownership rates has been most pronounced in the West. As of the fourth quarter, the homeownership rate there stood at 60.1%, the Census data show. That's down from 64.5% in the fourth quarter of 2006, which is about when home prices began their five-year tumble.
The West is home to three of the states most affected by foreclosures, which have hurt homeownership rates. Nevada, Arizona and California were the top three states last year with the highest foreclosure rates, market researcher RealtyTrac says.
While homeownership drops, more people rent. Almost 34% of occupied homes in the fourth quarter were rented, according to the Census data. That's up slightly from the same quarter a year earlier. The rental vacancy rate of 9.4% for the quarter was the same as a year ago but down from above 10% rates in the fourth quarters of 2009 and 2008, the Census data show. Higher rents are expected as more people rent, economist Dales says.
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On 2/1/2012 8:31 AM, Home Guy wrote:

This has been the subject of much discussion. To sum, it's because Canada understood the dangers of unregulated financial markets and has maintained much stricter controls over theirs. Thus, in Canada, there was no insanely loose lending and widespread fraud by banks, mortgage lenders, and developers leading to a bubble/bust.
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You've got that /quite/ backwards.
Outside of a couple of fairly minor programs, Canada never engaged in the sort of coercion Congress visited upon lenders in the US, and the sort of enticements and encouragement Congress and the Fed pushed on American borrowers.
Congress, the president and the Fed have all collaborated over 80-years using explicit and implicit methods to force lenders to finance home ownership, and in forcing lenders to accept lower and lower standards in order to try and ensure a vibrant and growing housing market.
Dating from the Hoover-era up to the present day, Congress passed such laws as the Own Your Own Home Act, Community Reinvestment Act (amended twice), American Community Renewal Act, American Dream Downpayment Assistance Initiative, all of which were explicitly aimed at pushing people into houses, and at pushing lenders to lend to them, with penalties for lenders who did not comply.
Then there were artificially-low rates for credit; speeches by presidents scolding lenders for failing to lend enough to minorities; mandates forcing Fan and Fred to buy extremely suspect mortgages; at one point eliminating the requirement that borrowers show proof of ongoing income; Barney Frank wanting to "roll the dice" on subsidized housing; forcing Fan and Fred to buy mortgage securities that all knew full-well were "opaque and difficult to understand". I could go on and on.
The crisis was not caused by lack of oversight, but by WAY TOO MUCH OF IT, especially after 2001.
Congress needs to /butt out of the whole business/ instead of running the show.
--
Tegger

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On 2/1/2012 11:20 AM, Tegger wrote:

I don't think The Canadian government forced Affirmative Action lending on their banks like The U.S. government did to U.S. banks. I could have gotten one of those Affirmative Action loans but knew better because if something happened to me, I would not be able to make payments. Sure enough, I was injured and unable to work as I had been working and it would have wiped me out. o_O
TDD
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Actually the S&L was largely related to government screwing around, too. The first batch came about because of the restictions on what they could pay for deposits meant that they couldn't do much to gain after inflation kicked in to get deposits. That, and the fact that they had (low interest) long-term mortgages and (high interest) short-term CDs, etc., brought about a mismatch of income with outgo that sent many over the edge. Round two took place because of bad oversight, but also because Congress again screwed around. They pulled some tax deductions that resulted in quite a few commercial buildings all of a sudden having no reason to live (the only reason being the money the owners were making on the now-pulled tax breaks) didn't. The third, and biggest wave, was also Congress meddling. The S&L regulators had begun to patch together marriages of good S&Ls with bad. However, in order to entice the good S&Ls to take the bad S&L's loans (which would have messed up the good S&L's balance sheets) the regulators came up with "regulatory good will" that was part of the contracts with the good S&Ls. Henry Gonzalex (D-TX) got a burr up his butt and introduced the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, that (among other things) took away the regulatory goodwill. This resulted in 3 things occurring. (1). No good S&Ls would come with a 100 miles of a bad one (2) Good S&Ls were no longer good and closed literally overnight adding to the confusion and the burden to the tax payers and (3). Cost the government an extra few $ billion when the good S&Ls sued for breach on contract and won (In United States v. Winstar Corp., 518 U.S. 839, 116 S.Ct. 2432, 135 L.Ed.2d 964 (1996), the Supreme Court upheld the decision that the United States was liable for breach of contract to thrifts with which it had agreed to permit the use as regulatory capital of regulatory goodwill that had been created in connection with the thrifts' acquisition of a failing thrift.

Canadians don't seem to realize that, as you have noted, the Canadian tend to regulate things but then stay out of the way. The US changes things on a dime and often with an almost willful disregard for the econ realities. They do things, are surprised when they can't will the world to conform to their version of reality, and then blather along instead of actually fixing the problem until it is too late.
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