Homeownership Rate Hit Record in 2003

[FloydGondolli]

Homeownership Rate Hit Record in 2003
Tue Feb 3, 2:09 PM ET Add Business - Reuters to My Yahoo!

WASHINGTON (Reuters) - U.S. homeownership climbed to a record high late last year as low mortgage rates made buyers out of renters, a government report showed on Tuesday.

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The Census Bureau (news - web sites) said 68.6 percent of homes were occupied by their owners in the fourth quarter of 2003, up slightly from a 68.3 percent homeownership rate in the fourth quarter of the previous year.

Economists said mortgage interest rates that slid to four-decade lows in June and hovered not much higher for the rest of the year put ownership within the reach of many renters. When interest rates slip, some monthly mortgage payments become comparable to rents.

"It's largely mortgage rates," said National Association of Homebuilders Chief Economist David Seiders. "It's certainly the excellent affordability conditions for home buying, particularly the second half of the year when mortgage rates were so low."
The homeownership rate for all minorities -- everyone except non-Hispanic whites -- reached a record high for the quarter and the entire year. President Bush (news - web sites) has made increasing minority homeownership a policy priority.

When broken into categories, homeownership gained for blacks but were statistically flat for Hispanics of any race from the fourth quarter of last year to the last three months of this yea, the Census Bureau said.

 

[lander]

This is precisely what happens when a president leads us into recession and has little hope of getting us out - the Feds are forced to cut interest rates to the lowest levels in several decades. This, of course, encourages people to purchase homes as the dirt cheap mortgages are too much to pass up.

IMHO this is a symptom of Bush's faltering ecomonic plan, not a sign of a strong economy.

Maybe Bill can respond - he's keen on these issues.

 

[FloydGondolli]

Now I have heard it all. Home ownership - BAD!

 

[lander]

Why were the rates slashed?

[This message was edited by lander on February 05, 2004 at 07:10 PM.]

 

[SanJose]

Floyd,

Why should this surprise you??? Lander and all of his New York City buddies feel that houses are a sign of pathetic suburban zombies who lack culture and diversity. They would rather live in lofts and rat infested studio apartments in an overcrowded, crime ridden major city so they can prove how "enlightened" they are. So to the Landers of the world, home ownership is not the important sign of "making it in life" that it is to most people.

 

[lander]

Actually,
I own a co-op apartment and have no outstanding mortgage, so mortgage rates have little concern to me except low mortgage rates inflate the cost of homes (ie people can afford more home because they are paying less interest).

That's all moot, because approving board approval my co-op will be sold over the next few weeks and I'll be relocating upstate (since you are so concerned with my life). I'm sad to announce that it will not be to a "booming" silicon valley, but I'll survive. I'll be sure to report to you when I purchase and if I take out a mortgage.

Thanks for your concern.

btw - Did any of your intellects figure out why the Feds cut the rates (over and over)?

 

[Jointpleasure]

Posted by lander:

"btw - Did any of your intellects figure out why the Feds cut the rates (over and over)?"



Answer - to help keep Clintons' recession from turning into Clintons' depression. Duh.

 

[KMAN]

Come on Lander, you can't be serious when you say Bush lead us into a recession. You know the facts as well as anyone that a recession was under way when Bush took office.

You are are smarter than that.

KMAN

 

[lander]

Joint,
Does this mean that you disagree with Floyd's implications that recessions leading to cut rates are "not a bad thing?"

 

[Jointpleasure]

From how I read your question, I would agree with Floyd. I would also add that recession leading to cutting taxes is also not a bad thing.

 

[wilheim]

AP News: Feb 5, 2004

Once Again, Bush's Rhetoric Doesn't Match the Reality.


Washington, D.C. — In a speech on Port Security today, Bush claimed that more than fifty percent of minority families own their own home. But statistics maintained by his own Department of Housing and Urban Development called his claim into question. HUD shows that fewer than half of all Hispanic and African American families, the two largest minority groups in the US, own their own home. Bush's rhetoric indicates his intent to use minority homeownership as a major issue in his re-election campaign, but it hides a startling reality — that Hispanic homeownership rates have fallen and those of African Americans have stagnated in the Bush economy, and that the only movement in the gap between white and Hispanic homeowners has increased under Bush's stewardship.

THE RHETORIC

"…most minority households own their own homes. We're closing the housing gap in America." -George W. Bush, Remarks on Port Security in Charleston, SC, 2/5/04

THE REALITY

48.7 percent of African American families own their own home
46.1 percent of all Hispanics own their own home.
Minority homeownership gap has increased under Bush.
The African American homeownership gap has grown 5 percent under Bush.
The Hispanic homeownership gap has increased over 12 percent under Bush.
"The truth is, African American homeownership has stagnated and Hispanic homeownership has decreased under this President after growing at record levels during the Clinton Administration," said Democratic National Committee (DNC) Chairman Terry McAuliffe. "For President Bush to try and claim otherwise when his own agency disputes his rhetoric is another example of this President attempting to distort his dismal record and policies.

 

[WildBill]

Home ownership rate has little to do with a good economic situation. Lander was close to it actually, the low rates are such a key factor. Thing that really has driven this has been two items. One is so many people got screwed by the downturn in the stock market that they just decided to sock away their savings in their house. The second has been that lenders are swimming in liquidity right now, low rates has made it imperative they get their funds out the door and investing in home loans seems a lot better to banks now than investing in businesses and other loans.

The thing that you have to really be worried about is the level of risk banks are willing to take with home owners. Not only are they giving out incredibly low terms to even bad credit, but they are cashing people out left and right. What is really hidden out of this is people prop themselves up by taking out their equity, money they earned not through traditional savings but just market value appreciation. That is extremely dangerous because in truth so many people after taking out equity have so little cushion should values drop somewhat. This on top of so many first time buyers who usually have almost no equity and people that stretch to move-up into a house they can barely afford.

Simply put I think housing market has been good for the economy, but it really doesn't reflect the health of the economy. Ownership of housing by residents really is a meaningless issue if you look at it purely economically. Everyone must live somewhere, whether they rent or buy isn't much of an issue from a macro sense. The macro view is that the houses exist and someone owns them, so the fact that the resident owns it means little. What has to be worrying is the savings rate of this country, something that the Bushies WISELY ignore. I mean not just ignore, but sweep under the carpet. That could be our eventual downfall and not one person mentions it because nobody cares about savings rates except economists, and by extension currency traders. If anyone with a voice got the country's attention on the savings rate the Bush team would be scurrying trying to tell you nothing is wrong when everyone with an econ degree could tell you it is a disaster waiting to happen.

 

[Jointpleasure]

posted by Wildbill:
"If anyone with a voice got the country's attention on the savings rate the Bush team would be scurrying trying to tell you nothing is wrong when everyone with an econ degree could tell you it is a disaster waiting to happen.

I don't have an econ degree but I could have told you we had a FALSE economy when before the dot com crashes. I guess you can always look at something, no matter how good it appears, to be a negative.

 

[TheFunkMonkey]

I think "homeownership" is a bit misleading. If you're still paying the mortgage, do you really "own" the home? Nope, the bank owns it.