Vacant Homes for Rent contribute to 19M Empty US homes in 2008
The U.S. Census Bureau recently reported a record high of 19 million vacant houses in 2008. The figures include properties for sale and homes for rent. This is the worse housing slump in the country since the Great Depression.
The situation has led to decreasing property values in nearby homes, and more homeowners deciding to leave their homes as expenses, including mortgages, rise.
In October 2008, sales of rental homes decreased 4.98 million annually. The median price also fell 11.3 percent from 2007, the worst downturn since records began in 1968. This caused economic analysts to project a continued decrease in homes sales, homes for rent included. Demand for homes was also very weak as sales came from the purchase of cheap properties that were foreclosed.
Now it seems as if the hoped for stabilization in the housing market is still far off into the future. According to the U.S. Census Bureau, the number of vacant homes in the fourth quarter jumped to 6.7 percent compared to figures from 2008. Empty homes for sale also increased 2.9 percent in the same quarter, the highest recorded data since 1956 records. Many people are also giving up selling their second homes and instead turn them into vacation home rentals.
University of San Diego director of real estate programs for the School of Business Administration Norm Miller projects that around a third of homeowners with homes values that dropped 20 percent or more below the loan principal are going to give up their homes and hand them back to the banks.
Meanwhile, President Obama, who has promised to address the foreclosure crisis, is now considering giving government guarantees for home loans adjusted by services to stop foreclosures. The proposal aims to secure lenders from default when they modify their loan terms for their borrowers.
One of the administration’s and Congress’ biggest concerns is rehabilitation of the worsening housing market for people to keep their homes and even their homes for rent.
