Although mortgage rates continue to hover at all-time lows, one industry expert expects the U.S. homeownership rate to decline even further in the coming years.
During the second quarter, the homeownership rate across the country was at just 65.5 percent, down 0.4 percentage points from a year earlier, according to data from the Census Bureau.
One analyst anticipates a future revival of the foreclosure process to push the rate even lower. Tim Rood of the Collingwood Group stated that minority neighborhoods may be hit especially hard.
"Delinquencies and foreclosures continue to sustain higher rates for African American and Hispanic borrowers as compared to white borrowers," Rood wrote in a recent report, according to HousingWire.
Specifically, Rood claims there could be as many as 2 million new foreclosures in the next few years. However, with a growing number of borrowers taking advantage of record-low mortgage rates and government initiatives such as the Home Affordable Refinance Program to restructure their loans into more favorable terms, there may not be a sharp increase of repossessions in the latter half of 2012.
Mortgage rates at all-time lows
The average rate for a 30-year fixed-rate mortgage recently fell to just 3.49 percent during the week ending July 26, according to a report from Freddie Mac, while the rate for a 15-year FRM averaged 2.8 percent. New economic uncertainties are believed to have contributed to the declines.
"Market concerns over the strength of the economic recovery brought long-term Treasury yields to new lows this week allowing fixed mortgage rates to reach record levels," said Freddie Mac vice president and chief economist Frank Nothaft.
Additionally, a recent decline in consumer confidence could also impact buying activity and, subsequently, the homeownership rate in the future. In June, confidence levels experienced the largest month-over-month fall since September 2011.
During the same period, property data indicates the existing-home sales fell to an annualized rate of just 4.36 million properties, according to a report from the National Association of Realtors. This the the slowest the pace has been since October 2011. At the same time, the new home sales rate fell to the lowest level experienced since the beginning of the year.