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By 24/7 WALL ST
The dream of owning a home has become increasingly unattainable for many Americans, and the situation is not likely to improve soon, as the collapse of the housing market and the recession continue to take their toll.
That is the disturbing conclusion to be drawn from the U.S. Census Bureau’s newly released report, "Housing Characteristics: 2010," an overview of the national home market at the end of the last decade.
One of the highlights of the report is a list of the states that have the highest and lowest percentage of homes occupied by their owners.
A review of the data by 24/7 Wall St., which offers analysis and insight for equity investors, found that homeownership rates were high in thinly populated states and those with low home prices, while homeownership was low in states with expensive homes and large cities.
5 states with highest homeownership rates
1. West Virginia
5 states with lowest homeownership rates
1. New York
5. Rhode Island
The swing between the states with the highest and lowest homeownership is extraordinary. Just over 53 percent of the people in New York state own homes. At the other end of the spectrum is West Virginia, with a homeownership rate above 73 percent. In addition to New York City, New York state includes the relatively large cities of Rochester, Buffalo, Syracuse and Albany. In West Virginia, by contrast, the two largest cities — Charleston and Huntington — are barely cities at all.
Together, they have just over 100,000 people in a state with 1.9 million residents. For this article, 24/7 Wall St. has primarily considered cities’ metropolitan areas, which are cities and their adjacent communities that, according to the Census Bureau, "have a high degree of economic and social integration" with the cities.
According to the report, in the last decade, homeownership in the U.S. dropped the most since 1940. The postwar housing boom lasted for over half a century as increased construction and liberal lending practices made homes affordable to a large majority of Americans.
Subprime mortgages stretched that ease of availability to the breaking point. When the market collapsed, so did the ability of many Americans to own homes because of tighter lending practices and fears that the market still has much further to fall.
The pattern of homeownership will probably not change much in the years ahead. People in large cities have opportunities to rent not available in suburban and rural areas. Home prices are low in states where the number of people per square mile is low. There is little supply in these states, but their populations are not large enough to create excessive demand.
The American dream of homeownership may have peaked around 2000. Much of the U.S. population is still in a struggle with high debt and stagnant income. And job security may not return to pre-recession levels for a number of years. Even if the reasons to own a home return with rising prices, the ability to buy one may not.
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