LITTLE ROCK — The proportion of homeowners in the United States fell over the past decade at a rate not seen in more than 70 years, and Arkansas was among the states that saw the biggest drops, the Census Bureau reported Thursday.
The national drop of 1.1 percentage points was the first since 1990 and the largest since the percentage of home ownership fell 4.2 points between 1930 and 1940.
Despite the decline, the country still has more homeowners than renters, the numbers show.
In 2010, 76 million, or 65.1 percent, of the nation’s 116.7 million occupied housing units were dwellings for their owners, the 2010 Census figures show. That was down from 66.2 percent in 2000,which had been the highest rate of owner-occupied housing since the bureau began tracking it in 1890.
Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas at Fayetteville, said the past decade’s drop in home ownership was a necessary correction to a period in which low interest rates, subprime mortgages and loose lending practices led to a housing bubble that devastatingly burst.
“Home ownership is obviously not the right economic choice for everyone,” Deck said. “One of the things that got us into the mess that we’re in is that the decision-making process around home ownership got distorted ... the numbers that we’re seeing here are some part of the correction of the excesses of the decade.”
Walter Molony, spokesman for the National Association of Realtors, agreed.
“The rate that we hit in the middle part of the decade, pushing close to 70 percent, that was just not sustainable. ... Those folks were either not ready for the responsibility of home ownership or weren’t going to be able to stay in a home,” he said.
Seven of the 10 states that experienced the largest drops in home ownership were in the South, a factor that made the region the top loser in the census analysis. South Carolina saw the sharpest decline of 2.9 percentage points.
Arkansas’ home ownership rate fell 2.4 percentage points, the seventh-biggest decline among all states. In 2000, 69.4 percent of dwellings in the state were owner-occupied; in 2010, the rate fell to 67.0 percent.
Nine states and the District of Columbia saw increases in home ownership rates over the past decade. Hawaii, New Hampshire, Washington, D.C., were the only three to see growth of more than a percentage point.
Arkansas saw the overall number of owner-occupied homes climb over the past decade, but the growth was slower than it had been between 1990 and 2000.
During the 1990s, the state’s homes inhabited by owners grew 16.7 percent compared with 6.2 percent during the past decade, the 2010 counts show.
Nationally, owner-occupied homes grew 8.8 percent between 2000 and 2010, down from the 18.3 percent increase during the decade before.
Growth rates between 2000 and 2010 were dragged down by the recession that economists say officially lasted from late 2007 through mid-2009.
“The bigger contrast is between the two halves of the past decade. If we had a midpoint in 2005, we would have seen a continuation of the 1990s trend,” said Michael Pakko, the state economic forecaster.
Still, the numbers show the nation remains one of home owners, a trend that began in the wake of World War II, he said.
“Going from 1940 to 2000, we went from less than one half of households owning a home to two-thirds; that was a pretty big increase. The decline in the last few years has been relatively small,” said Pakko, the chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
In 2010, there were more than 768,000 Arkansas homes resided in by owners. That number is about 67 percent of the more than 1.1 million occupied housing units in the state. Of owner-occupied homes, 469,654 or 61 percent were owned with a mortgage, census figures show.
While homeowners still outnumber renters in nearly all U.S. counties, the majority had lower proportions of owner-occupied homes in 2010 than in 2000.
Pakko said the widespread declines show “the events of the past three or four years have really diminished the value of home ownership in a lot of people’s minds.”
Deck agreed.
“It’s strange to think of the right amount of home ownership, but there is an economically efficient amount of home ownership out there. It doesn’t mean that everyone should rent or everyone should own,” she said.
Still, the idea of home ownership being part of the “American Dream” remains strong, she said, noting it was one of the reasons there weren’t worse declines in the state.
“It’s a reflection on the stability of the idea of home ownership that it didn’t fall anymore than it did,” she said. “It would have been more economic chaos had those numbers changed more substantially.”
Front Section, Pages 1 on 10/07/2011