(TheNicheReport) — Homeownership, that precious tenet of the American dream, is losing ground due to the growing interest in the rental market by families and investors. The number of homeowners in the United States is currently at a level last seen in the late 20th century, even as the real estate market picks up and inventories of rental units are running low. Renters are hardly the only ones contributing to this trend; investors looking to cash in on the rental craze are snapping up properties faster than sellers, mostly banks, can put them up for sale.
Figures released by the Census Bureau show that from the end of March to the end of June of this year, the rate of American homeownership ticked up one basis point to 65.6 percent. The last time such figure was calculated was back in 1997, in the midst of the of the dot-com bubble and prior to the housing bubble. The peak homeownership was reported back in 2004, at almost 70 percent.
Analysts expected a higher uptick on the ownership rate based on the number of home sales thus far this year. The housing market is not quite in recovery mode, but at least properties are being purchased -mostly by investors. For this reason, the number of homeowners in the United States is not expected to climb significantly during these apparent initial stages of a housing market recovery. Investors are purchasing single-family homes and multifamily residences in bulk, but these transactions do not assign an occupant owner to the property.
This trend is expected to continue thanks to banks easing up on their own restrictions on real estate owned (REO) portfolios. Investors are mostly looking for great deals, and banks are warming up to the idea of reducing their distressed portfolio holdings. The red-hot rental market means that renters may end up paying a little more than usual, but landlords and property managers may have to wait before offering a wider choice of properties. Many of the properties being acquired by investors are not quite rental-ready, and it may take weeks or months before they are restored to move-in conditions.