BY LUCIA MUTIKANI
WASHINGTON Tue Jul 29, 2014 12:53pm EDT
The seasonally adjusted homeownership rate fell to 64.8 percent, the lowest level since the second quarter of 1995, the Commerce Department said on Tuesday.
That compared to 65.0 percent in the first three months of 2014 and 65.1 percent a year ago.
Economists said homeownership, which peaked at 69.4 percent in 2004, could fall even further as banks maintain stringent lending practices and wage growth remains tepid, despite an acceleration in job creation.
“We are becoming more of a rental society. It’s becoming harder to own a home,” said Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts. “People who lost their homes to foreclosure are now renting and credit standards have tightened significantly.”
The 2007-2009 recession, sparked by the collapse of the U.S. housing market, has left the economy with deep scars that will take long to heal. Wage growth remains lackluster, even though the unemployment rate is at six-year lows and the economy has recouped all the jobs lost during the downturn.