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U.S. property prices rise as homeownership declines

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Guest | 29 Apr 2013, 10:43 PM Agree 0

The number of Americans who own their own home fell to 65 per cent in the first quarter, down 0.4 percentage points from a year earlier and the lowest level since the fourth quarter of 1995. Then, it stood at 64.8 per cent, the Census Bureau said.
Separately, the closely watched S&P Case Shiller Index showed that average home prices increased 8.6 per cent and 9.3 per cent, respectively, for its 10- and 20-city composites.
The agency reported that all 20 cities covered by the indices posted year-over-year increases for at least two consecutive months.
In 16 of the 20 cities, annual growth rates rose from the last month, with Detroit, Miami, Minneapolis and Phoenix seeing slight annual deceleration ranging from -0.1 to -0.4 percentage points.
The gains were highest in Phoenix which posted a year-over-year return gain of 23.0 per cent while Atlanta and Dallas had their highest annual growth since the indices were established in 1992 and 2001.
The dual movement, with ownership declining while prices rise, may be indicative of the power institutional buyers are having on the U.S. market. Those big buyers, backed by capital from sources such as hedge funds and Wall Street banks, has been buying distressed properties in targeted markets and converting them to rental properties under management.
Institutional buyers have been most active in the sun states, including Texas, Georgia and select cities in Florida.
  • Monica | 08 May 2013, 02:49 PM Agree 0
    Well, it’s clear that when prices rise than consumers demand declines because all they consumers would like to have an opportunity to enjoy low prices. I would say that things on the US housing market change very often and that’s why it will not be a surprise if the next month everything will become cheap and people will start buying houses again. It’s worth to add that American economy is still a bit tough and many people use alternative borrowing methods to buy property and other things. It’s still hard to finance, for example, buying a house without taking out a mortgage.
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