Census Bureau Report Confirms Housing Crisis

<p>The U.S. Census Bureau's Report on Vacancies and Homeownership shows that homeownership rates are declining while inventories of available housing are increasing.</p>
February 7, 2008, 10am PST | Michael Dudley
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"The housing and mortgage meltdown caused the biggest one-year drop in the rate of homeownership on record, according to government figures released Tuesday. The decline, while expected, is yet another indication of the housing market's sudden and dramatic turn. The Census Bureau report showed that home owners accounted for 67.8% of occupied homes in the fourth quarter, down 1.1 points from a year earlier. It's the largest year-over-year drop recorded in the report."

"'It's an incredible story,' said Dean Baker, co-director of the Center for Economic and Policy Research. 'We're back to where we were in 2002, which is before the subprime nuttiness and run-up in prices. And it's not clear how much farther we're going to fall.'"

"The ownership rate was well below the 68.2% ownership rate in the third quarter of 2007. Homeownership rates, which have been tracked since 1965, hit a record high of 69.2% in the second and fourth quarters of 2004."

"The glut of vacant homes and the falling rates of ownership are signs of the evaporation of demand for home sales, which in turn has hammered housing values, particularly in neighborhoods with multiple homes sitting empty."

"The downturn has also hit home builders particularly hard. Hollywood, Fla.-based home builder Tousa (TOUS) filed for bankruptcy protection Tuesday. [B]uilders have been stuck with a record inventory of 195,000 completed homes at the end of December, according to a separate Census Bureau report Monday. That report also indicated that new home sales posted the biggest annual drop on record last year."

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Published on Tuesday, January 29, 2008 in CNN Money
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