Realtor attributed the decline in the homeownership rate in the first quarter to a lack of affordable housing.
“Though inventory levels continue to rise on an annual basis, the number of homes for sale is still below pre-pandemic levels, which has kept upward pressure on home prices and limited affordable options for many households,” it stated.
The homeowner vacancy rate, which is the proportion of properties owned that are vacant and for sale, was 1.1 percent higher than in the first quarter of 2024 but remained the same in the fourth quarter of 2024. This was higher in major cities compared with the suburbs. The vacancy rate was the lowest in the Northwest and highest in the West.
According to Realtor, vacancy rates had remained below the 1 percent level from the first quarter of 2022 to the third quarter of 2024, which emphasized “the lack of for-sale inventory.”
“Though recent inventory gains have kept vacancy at a recent high, there are still far fewer vacant homes than was typical in the years pre-pandemic, suggesting that inventory still has some ground to cover,” it stated.
Overall, roughly 89.5 percent of all housing units in the United States were occupied in the first quarter of this year, with the properties occupied by either homeowners or renters, the bureau stated.
“Vacancies indicate that there are enough homes available, but these may not be the right type, in the ideal location, or at an affordable price point,” it stated, noting that the housing market demand was “seriously suppressed” by elevated interest rates.
The elevated rates make mortgage payments more expensive, thus deterring prospective buyers who are seeking affordable homes.
John Sim, head of securitized products research at JP Morgan, said the housing market situation “is not going to change until we get mortgage rates back down toward 5 percent, or even lower.”
Easing Housing Conditions
There are signs that housing costs are cooling down as home prices fall. In the four weeks that ended on April 20, the median sales price of homes fell year-over-year in 11 out of the 50 populous metros in the United States, real estate brokerage Redfin said in an April 24 statement.“Home prices are falling in many major metros—and price growth is decelerating nationally—because many house hunters are backing off, but the number of homes for sale is holding up,” the brokerage stated.
“Home tours are slowing, mortgage-purchase applications are falling, and Redfin agents in many parts of the country report that would-be buyers are ultra-cautious amid high housing costs and widespread economic uncertainty.”
Chen Zhao, Redfin’s economic research lead, advised sellers to price their homes “fairly.” Sellers may have to lower their asking prices in order to “sell quickly and avoid giving concessions.”
This stability bodes “well for buyers and sellers alike,” he said.
The Act proposes several key measures, including requiring the Department of Agriculture to expedite the loan approval process and updating rules for home repair loan programs to make it less burdensome to obtain smaller loans.
“Improving homeownership opportunities, particularly in rural areas, is critical for the well-being of South Dakota families,” Sen. Mike Rounds (R-S.D.), one of the lawmakers who introduced the bill, said in a statement.
“[The act] would streamline federal programs and remove barriers to homeownership, making this dream a reality for more South Dakotans. It would also preserve existing affordable housing and rental assistance in rural areas.”
