How did the housing bubble affect Utah homeownership rates?

The U.S. Census Bureau just released new housing data for 2011 including vacancy and homeownership rates. The recent rise and collapse of the housing market bubble is certainly reflected in homeownership rates. However, there are some notable differences in the timing of peak levels of homeownership  between Utah and the U.S.

Nationally, homeownership rates peaked in 2004--before even most prescient economists were warning of a bubble market. On the other hand, Utah's peak homeownership rate occurred in 2008--four years later. Of course, the Wasatch Front, in particular, was slow to join the speculative bandwagon that drove the higher prices and rampant homebuilding of the housing bubble. In addition, Utah (a relatively small state) shows more variation in its homeownership rates than does the U.S.

However, both the U.S. and Utah's homeownership rates reflect the collapse of the housing market. Between Utah's peak year of 2008 and 2011, homeownership rates dropped precipitously by 5 percentage points. Currently, Utah's homeownership rates have fallen to 1995 levels--wiping out the gains of the previous 15 years. Nationally, 2011 rates are down 3 percentage points from their peak. However, from a long-term historical perspective, home ownership rates remain high.

You'll obviously notice that during the last 25 years, Utah has maintained a higher level of homeownership than the than the U.S. average. In 2011, Utah's homeownership rate measured 71.4 percent compared to a nation rate of only 66.1 percent. In fact, despite the recent plunge in homeownership rates, Utah's rate of homeownership ranks as the 12th highest in the nation. Several states with expensive housing (California, New York, Hawaii) and our neighbor Nevada show the lowest homeownership rates--below 57 percent. (Note that Nevada's low homeownership rate is typical--not just the result of the recent housing market collapse.)

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Remarkably, the recent boom-to-bust cycle in the housing market has had little effect on the rate of homeowner vacancy rates in Utah. The rate reflects the number homes for year-round use that are vacant and awaiting sale divided by the total year-round home inventory. Utah rental vacancy rates proved much more volatile and actually showed their most recent peak in 2009 as the recession bottomed out.

To access the full set of housing-related data from the Census Bureau, click here.