Homeowner Vacancy Rate Rises as Homeownership Rate Slips in 4th Qtr 2007

Homeownership fell by an extremely large -.4% QoQ, to 67.7%, in the fourth quarter of 2007. A year ago, the homeownership rate was 68.8%. Today's data shows accelerating errosion in the ability of families to afford their homes as defaults rise. The trend is expected to continue as home prices continue to fall and credit remains tight. The homeowner vacancy rate edged up to a record high 2.8% in the 4th quarter, from 2.7% the prior quarter. A 2.8% vacancy rate equates to about 1 million vacant homes for sale. This elevated excess supply will probably keep home prices under pressure. Rental vacancy eased back to 9.6% from 9.8%, but still remains historically elevated. The move by homeowners back to renting is likely to take some of this supply off of the market in coming months.