The U.S. homeownership rate climbed from the lowest level in 18 years, signaling that the real estate rebound is drawing in more buyers.
The share of Americans who own their homes was 65.3 percent in the third quarter, up from 65 percent in the previous three months, the Census Bureau reported today. The prior level was the lowest since the third quarter of 1995.
Rising real estate values are removing negative equity, helping homeowners avoid foreclosure, while also luring would-be purchasers into the market before prices and mortgage rates go higher. The pool of eligible buyers is expanding as U.S. employment improves and families who lost properties during the recession repair their credit and seek another chance at owning.
“Today’s data could be interpreted as an early sign that mortgage buyers are finally beginning to make more of a contribution to the housing recovery,” Ed Stansfield, chief property economist at Capital Economics Ltd. in London, wrote in a report today.
It is too soon to call a turning point given recent increases in mortgage rates and declines in home sales, he said. Contracts to buy previously owned residences tumbled the most in three years in September as borrowing costs climbed, the National Association of Realtors reported last week.