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02 Aug 10 Homeownership Rate Forecasted to Drop

The homeownership rate is declining, with some analysts projecting that it will reach 62 % as early as 2010. That rivals the low in 1960 when it was at 61.9%. Homeownership hit a high of 694 % in 2004. “Homeownership fell during the quarter when government was offering a tax credit to first-time home buyers.  

Why is Homeownership Declining if Mortgage Rates Are at Record Lows?

John Burns, CEO of John Burns Real Estate Consulting, a California-based housing market analyst asks, “What do you think is going to happen now that there’s no tax credit?”  Burns believes that 6 million of the 8 million home owners who are behind on their mortgage loans will have their properties repossessed in the next two years, pushing down the homeownership rate quickly, especially among low-income consumers.  Some observers are more optimistic. Arthur C. Nelson, director of the University of Utah’s Metropolitan Research Center, says the rate may not go down as fast or as far as predicted because others will purchase many foreclosed homes

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