There's no place like home, the saying goes, and the latest census numbers back that up. U.S. homeownership rate increased by 2 percentage points in the last decade, the largest gain since the 1950s. The increase marked the resumption of the nation's postwar homeownership rate ascent, which had stalled during the 1980s. The figures showed that by 2000, 66.2 percent of Americans owned their homes, the highest homeownership rate ever recorded.
10 Good Years
The net increase of 10.8 million homeowners during the 1990s boosted the ranks of American homeowners to 69.8 million, according to census 2000 data. The census found that growth in homeowners during the last decade was 50 percent greater than during the 1980s and was exceeded only by a record increase of 11.9 million during the 1970s.
"That growth could continue apace if mortgage rates remain low and the economy keeps from falling off a cliff," says John Martin of Martin and Associates, a market analysis firm in Newport Beach, Calif.
"The problem is that when the economy is good we keep ratcheting sales prices up, and in every cycle we overdo it," Martin explains. "That's where we are now. I expect to see across-the-board price decreases throughout the nation as the economy slows."
Bright skies ahead?
"The terrorist attacks of Sept. 11 have resulted in plummeting consumer confidence levels and the resulting layoffs in the airline and tourism industries are scaring people," says David Seiders, the NAHB's chief economist.
A long-drawn out military campaign also could slow the growth in homeownership as the non-defense-related economy declines, Seiders warns. That could change, however. "When people think about the gyrations the stock market has gone through, it brings home how good an investment their own homes are." Nonetheless, Seiders expects the downturn to reverse itself by the second quarter of 2002 as long as no other major act of terrorism occurs.
A mistake many builders make in downturns is sitting on the sidelines, waiting for things to improve. Martin advises, "This is the time to buy if you can. You need to look around and see what the opportunities are--and take advantage of them."