Home Inventory Dips, Homeownership Rises

The Census Bureau has reported that the inventory of vacant homes listed for sale fell 3% in the second quarter to 2.17 million, and the home ownership rate rose from 67.8% in the first quarter to 68.1%. Listings of vacant homes rose dramatically in 2006 to 2.1 million, and this overhang on the real estate market continues to exert downward pressure on house prices. Home builders view the inventory as a negative factor that depresses demand for newly constructed homes. The Federal Reserve Board's Beige Book noted that home sales are weak across the country and "inventories of unsold homes and condos were reported higher or excessive" in several areas. The Fed's survey of economic activity in early July also found "increased use of incentives and discounting" to sell homes. The Census Bureau report indicates that the home ownership rate for blacks rose from 47.1 % in the first quarter to 47.8% in the second quarter, while the rate for Hispanics rose from 48.9% to 49.6%.