St. Louis Fed Launches New Housing Market Perspectives Report Featuring Economist Bill Emmons

ST. LOUIS – The St. Louis Fed's Community Development department has released a new online publication featuring analysis from St. Louis Fed economist and assistant vice president  Bill Emmons as part of its quarterly Housing Market Conditions report.  The inaugural issue of "Housing Market Perspectives – On the Level with Bill Emmons," looks at the question of why home ownership rates in the U.S. are at their lowest levels since 1968, despite historically low mortgage rates and rising employment.

Emmons noted the following improvements in the U.S. housing market in 2015:

• house prices increased faster than inflation for the fourth consecutive year;
• home sales increased 7 percent in 2015, reaching the highest level since 2007;
• new-home construction rose 11 percent in 2015, likewise the best since 2007;
• mortgage balances increased for the first time since 2008; and
• mortgage delinquencies declined for the sixth straight year, returning to 2007 levels.

Nonetheless, amidst these improvements, "one important gauge of housing conditions continued to fall in 2015—the homeownership rate," Emmons said."After peaking in 2004 at 69 percent, the national homeownership rate declined in 2015 to 63.7 percent.

“This marks the 11th consecutive year of decline and brings the homeownership rate back to the level it first reached in 1968,” he added.

To help explain why homeownership has dropped to these levels, Emmons discussed two possible scenarios, the "return-to-normal" scenario and the "retreat-from homeownership" scenario.

"Perhaps there are elements of both explanations at work," he said. "In any case, it appears unlikely that the U.S. homeownership rate will return to its historic peak of 69 percent anytime soon."

The new publication complements the data and heat maps updated each quarter as part of its Housing Market Conditions report that shows the latest housing market data for the U.S. and states within the St. Louis Fed's Eighth District.

Housing Market Perspectives can be found on the St. Louis Fed's website.

The St. Louis Fed's quarterly Housing Market Conditions report provides a snapshot of conditions in the U.S. and in the Federal Reserve's Eighth District states via:

• color-coded maps that reflect the number of mortgages considered seriously delinquent;
• color-coded maps that reflect the quarterly percent change of seriously delinquent mortgages, and
• historical house price charts based on Federal Housing Finance Agency (FHFA) and CoreLogic data.

To subscribe for email alerts for Housing Market Perspectives, sign up via the subscriptions page.  For further information, please contact Suzanne Jenkins at 314-444-8842 or suzanne.m.jenkins@stls.frb.org.