In the past year, studies show that the rate of homeownership has fallen at the largest percentage since the Great Depression, even though overall homeownership numbers remain relatively high. According to the Census Bureau, homeownership rates are at their lowest levels since 1998.
The current rate is down 67.1 percent since 2010, coinciding with a simultaneous increase in foreclosure rates. Interest rates have also hit a historic low, with 30-year fixed mortgage loans falling to 3.94 percent. According to a Freddie Mac survey, this is the first time in history that rates have fallen below four percent.
Similarly, pending home sales have fallen consistently over the past three months. Though some of the decline has been attributed to Hurricane Irene, economists suggest that there are larger factors at work. In fact, economists predict that so long as home prices continue to fall and unemployment remains high, low interest rates will not be enough to entice potential home buyers.
Is Another Recession Coming?
Analysts are looking at these statistics with a grim sense of foreboding, estimating that another recession could be on its way. In fact, this week’s decline in the ten-year Treasuries could be a result of growing concerns that the world is facing a second global recession
This concern is fueled by Bureau of Economic Analysis (BEA) reports that consumer spending only increased 0.2 percent last month, while average personal income dropped by 0.1 percent. This is the first decline in personal income since October 2009.