Tuesday, April 30, 2013

Home Prices on the Rise, but Home Ownership in Decline

The Oregonian published a pair of stories today related to the housing market. 

The first article reports that home prices picked up in Portland and other major U.S. cities in February. The Case-Shiller home price index for the U.S. rose by 9.3 percent from the previous year. That's the largest year-to-year gain since May 2006. Portland saw an increase of 9.4 percent over the year.

The Oregonian notes that the lowest-priced homes have shown the biggest gains. In Portland, the least expensive one-third of homes showed a 15 percent gain in price from February 2012 to February 2013. At the same time, prices rose by 11 percent for the middle one-third of homes, and the most expensive homes experienced a price gain of 7 percent.

The second article tempers the optimistic news about home prices. Newly released data from the U.S. Census Bureau show that home ownership is on the decline. In Oregon, the home ownership rate fell to 62.3 percent in the first quarter of 2013 from 66.3 percent one year prior. 

The home ownership rate has fallen steadily from the peak of 69.4 percent in 2004, mainly due to those in renting households, who've generally been slower to purchase homes. The Census Bureau estimates also show that Portland ties with Grand Rapids, MI for the tightest rental market among the nation's 75 largest metropolitan areas. The rental vacancy rate in Portland sits at 3.3 percent, well below the 8.6 percent seen nationwide.

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