Tag Archives: 2010 United States Census

CR: Lawler: How Much Has the Single Family Housing Market Shifted to Rentals (in numbers)?

Lawler: How Much Has the Single Family Housing Market Shifted to Rentals (in numbers)?

by Bill McBride on 4/24/2013

From economist Tom Lawler:

While good, reliable, consistent, and timely government data on the housing stock and housing tenure do not exist, the limited data available suggest that over the last few years (1) there has been a sizable increase in the number of SF housing units occupied by renters; (2) a decent-sized decline in the number of SF housing units occupied by owners; and (3) this trend began several years ago, and several years before widely-publicized “institutional” investor buying emerged.

Estimates of the SHARE of SF housing units occupied by owners vs. renters are available from the American Community Survey annually from 2006 through 2011 and biennially from the American Housing Survey through 2011, and “imprecise” estimates of the owner vs. renter share of “one-unit” structures can be derived from the detailed tables of the Housing Vacancy Survey through 2012 – though rental and homeowner vacancy rates for “one-unit” structures in the HVS include not just SF detached and attached homes but also manufactured/mobile homes. All three surveys show a substantial increase in the share of SF/one-units occupied homes occupied by renters from 2007 to 2011, and the HVS data show a continued share increase in 2012. Both the AHS and the HVS, however, appear to overstated significantly overall homeownership rates (based on a comparison to decennial Census results), while the ACS homeownership rates seem more consistent with decennial Census data. As such, I believe the ACS data on the renter share of the SF housing market is superior to the AHS and HVS data.

Rental Share Single Family Housing Market Click on graph for larger image.

Note: The estimate for 2012 is based on the 2012 vs. 2011 change in the HVS estimate of the renter share of occupied “one-unit” structures.

Translating the ACS share data to numbers, however, requires a little work. First, the numbers for households in the annual ACS results are “benchmarked” to the latest available housing stock estimate for that year, and there have been significant upward revisions in housing stock estimates. Second, the latest available “official” housing stock estimates do not incorporate post-Census analyses of the estimated “undercount” of housing units in the “official” Census numbers. And finally, the ACS appears to overstate the overall housing vacancy rate, though by less than the HVS or AHS. Unfortunately, adjusted for this last factor is difficult, since the degree of the vacancy rate “overstatement” is only available for 2010. As such, I only adjusted the ACS estimates for more reasonable estimates of the housing stock (incorporating the Census 2000 HUCS and the Census 2010 CCM).

Making this adjustment, and using estimates for the 2012 ACS data based on HVS results, it would appear that from 2007 to 2012 the number of SF detached and attached homes that were occupied by renters increased by about 2.6 million, while the number of SF detached and attached homes that were occupied by owners declined by about 1.3 million. The largest increase in both the number and the share of renter-occupied SF homes appears to have been in 2009.

Since “active” investor buying of SF homes that were then rented out has been going on for many years, why has the media only recently begun to focus intently on this “trend? First, investor buying in earlier years occurred when for-sale inventories (and REO inventories) and the pace of foreclosure were high, the economy in general and labor markets in particular were extremely weak, and there were no signs either of a housing “recovery” or improving home prices. Second, last year a number of large institutional firms very publicly announced plans to ramp up purchases of SF homes as rental properties. Third, their ramped-up buying came when overall inventories of existing home for sale, and especially “distressed”/REO properties for sale, had fallen sharply, as well as when an improved economy and record-low mortgage rates were producing a modest increase in potential demand from folks wanting to buy a home to live in. (Folks love anecdotal stories about how investors are “out-bidding” or “crowding out” first-time home buyers!)

And finally, their (and other) aggressive buying in the face of sharply lower inventories (large institutional investors appear to have lower “hurdle rates” than “traditional” investors) has helped fuel a significant recovery in home prices in many parts of the country (oh my, more “de-stickification!”)

All-Cash Share of Home Sales (Yearly Totals)
Phoenix Tucson California* Florida SF Florida C/TH Knoxville Omaha
2007 11.6% 12.6% 10.3% N/A N/A 12.4% N/A
2008 12.6% 18.8% 18.7% 25.5% 43.6% 15.2% 12.1%
2009 37.2% 23.9% 26.3% 36.8% 64.0% 17.8% 11.8%
2010 41.8% 28.3% 28.0% 42.3% 73.2% 22.1% 16.7%
2011 46.9% 34.6% 30.4% 45.5% 76.6% 24.5% 20.2%
2012 46.0% 34.4% 32.6% 45.7% 75.6% 26.6% 17.6%
*Derived from Dataquick chart; new and resale homes based on property records, all others MLS based.

In 2010 there were 141,722 MLS-based home sales (SF and C/TH) in Florida that were all-cash transactions, while there were 79,779 foreclosure sales and 53,780 short sales. In 2012 there were 54,607 foreclosure sales and 63,250 short sales (or 117,867 “distressed” sales, down 15,692 from 2010), but all-cash transactions increased by 28,647 to 170,369.

From 2009 to 2012 MLS-based home sales in Florida increased by 24.2%. All-cash transactions increased by 54.1%, while mortgage-financed transactions were very slightly LOWER in 2012 compared to 2009.

Read more at http://www.calculatedriskblog.com/2013/04/lawler-how-much-has-single-family.html#eoU14525vQZTblwA.99

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HVS: Q4 Homeownership and Vacancy Rates

HVS: Q4 Homeownership and Vacancy Rates

by CalculatedRisk on 1/31/2012 

The Census Bureau released the Housing Vacancies and Homeownership report for Q4 this morning.

As Tom Lawler has been discussing, this is from a fairly small sample, and the homeownership and vacancy rates are higher than estimated in other reports (like Census 2010). This report is commonly used by analysts to estimate the excess vacant supply for housing, but it doesn’t appear to be useful for that purpose.

It might show the trend, but I wouldn’t rely on the absolute numbers.

Homeownership RateClick on graph for larger image.

The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate declined to 66.0%, down from to 66.3% in Q3 2011.

I’d put more weight on the decennial Census numbers and that suggests the actual homeownership rate is probably in the 64% to 65% range.

Homeowner Vacancy RateThe Census researchers are investigating differences in Census 2010, ACS 2010, and HVS 2010 vacant housing unit estimates, but there is no scheduled date for any report.

The HVS homeowner vacancy rate declined to 2.3% from 2.4% in Q3. This is the lowest level since early 2006 for this report.

The homeowner vacancy rate has probably peaked and is now declining. However – once again – this probably shows that the trend is down, but I wouldn’t rely on the absolute numbers.

Rental Vacancy RateThe rental vacancy rate declined to 9.4% from 9.8% in Q3.

I think the Reis quarterly survey (large apartment owners only in selected cities) is a much better measure of the overall trend in the rental vacancy rate – and Reis reported that the rental vacancy rate has fallen to the lowest level since 2001.

This is the most timely survey on households, but unfortunately the survey has serious issues – and sadly many analysts still use this survey to estimate the excess vacant supply. However this does suggest that the housing vacancy rates are falling.

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Comments on the Housing Vacancies and Homeownership Survey

Comments on the Housing Vacancies and Homeownership Survey

by CalculatedRisk on 1/02/2012 

This morning Dean Baker wrote about the Housing Vacancies and Homeownership Survey: Robert Samuelson Oversells the Case for Economic Optimism (ht Joe)

[W]e are still far from making up for the overbuilding of the bubble years as indicated by the fact that the vacancy rate remains at near record levels.

(There have been some questions raised about the accuracy of the Census Department’s data, claiming that it overstates the number of housing units in the country. Those raising the issue fail to note that measures of housing starts do not include housing units that were created by conversion of commercial or industrial property, such as an old warehouse being turned into condos. The rehabilitation of dilapidated units would also not be included in housing start numbers. There were many cases of both ways of adding to the housing stock during the bubble years. Also, it is important to note that the Census data is giving the percentage of units that are vacant. The critics of this measure must show how the Census methodology would lead it to overstate the share of units that are vacant.)

First, the main criticism of the HVS is it doesn’t match the decennial Census results. The Census Bureau has acknowledged this and promised to investigate the differences. Here are some recent comments from the Census Bureau:

The most recent research has shown that the CPS/HVS and the 2010 census produced significant differences for vacancy characteristics. The rental vacancy rate from the April 2010 census was 9.2 percent, whereas the CPS/HVS reported the rental vacancy rate of 10.6 percent for the first half of 2010. The April 2010 census had a homeowner vacancy rate of 2.4 percent, while the CPS/HVS had a vacancy rate of approximately 2.6 percent for the first half of 2010. For occupied housing, the April 2010 census produced a homeownership rate of 65.1 percent, while for the first half of 2010, the CPS/HVS produced a rate of 67.0 percent.

It is important to note that the HVS is benchmarked to the decennial Census, so the most recent vintage for housing inventory was benchmarked to the 2010 Census. So clearly the Census Bureau thinks that is a better estimate of the total housing inventory.

Although the HVS is probably useful in showing the trends for the vacancy and homeownership rates, I wouldn’t rely on the absolute numbers – and I look forward to the investigation by the Census Bureau on the differences. Unfortunately this report is commonly used by analysts to estimate the excess vacant supply for housing, but – because the vacancy rates do not match the Census data (or the much larger ACS data) – it doesn’t appear to be useful for that purpose.

Here are some previous posts about some of the HVS issues by economist Tom Lawler:
• Lawler to Census on Housing Data: “Splainin” Needed Not Just on Vacancy Rate
• Census Bureau on Homeownership Rate: We’ve got “Some ‘Splainin’ to Do”
• Be careful with the Housing Vacancies and Homeownership report
• Lawler: Census 2010 and the US Homeownership Rate
• Lawler: Census 2010 Demographic Profile: Highlights, Excess Housing Supply Estimate, and Comparison to HVS
• Lawler: The “Excess Supply of Housing” War
• Lawler: Census Releases Demographic Profile of 12 States and DC: Confirms Bias of HVS
• Lawler: Census 2010 and Excess Vacant Housing Units
• Lawler: On Census Housing Stock/Household Data
• Lawler: Housing Vacancy Survey appears to massively overstate number of vacant housing units
• Lawler: US Households: Why Researchers / Analysts are “Confused”

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The American Community Survey and Total Housing Units

The American Community Survey and Total Housing Units

by CalculatedRisk on 12/14/2011 

In an earlier post – The Excess Vacant Housing Supply – I mentioned that there are serious question about the Census Bureau’s Housing Vacancies and Homeownership (CPS/HVS) survey, and that it is probably not useful for estimating the excess vacant housing supply.

There is another more robust annual survey – the American Community Survey (ACS) – that is based on a sample of 3 million housing units every year. Unfortunately this data doesn’t jibe with the decennial Census data.

The table below shows the ACS estimates of total housing units taken every July 1st. In 2000, the ACS was benchmarked to the 2000 decennial Census (as of April 1st). I’ve included the total completion data for single family, multi-family, manufactured homes – and calculated the implied number of demolitions using the change in the ACS.

For most years the ACS data looks somewhat reasonable, although I’d expect the number of demolitions to have peaked in 2004 through 2006. Over the first nine years of the decade, the change in the ACS averaged about 200 thousand less than total completions – suggesting demolitions of around 200 thousand per year and that is probably reasonable.

However, in April 2010, the decennial Census showed significantly more housing units than the ACS had captured (obviously a negative 1.15 million homes weren’t demolished in early 2010!) The decennial Census data itself seems a little off since it suggests only about 645 thousand housing units were demolished during the decade (that would be very low). Most estimates are demolitions are in the 200 to 300 thousand per year range (so the ACS seemed reasonable through the first 9 year of the decade).

These discrepancies really needs to be explained before the ACS can be used for estimating the excess supply of vacant housing units. It is possible the 2000 Census under counted the total number of housing units – or the 2010 Census over counted the total. Or perhaps the completion data from the Census Bureau is low. But this shows one of the reason it is very difficult to estimate the excess vacant housing supply – an error of over 1 million units is huge.

Source Date Period Total Housing Units Change Completions, Total Calculated Demolitions
Census 4/1/2000 115,904,473
ACS 7/1/2000 3 Months 116,300,799 396,326 468,300 71,974
ACS 7/1/2001 1 Year 117,905,005 1,604,206 1,719,600 115,394
ACS 7/1/2002 1 Year 119,456,206 1,551,201 1,771,800 220,599
ACS 7/1/2003 1 Year 121,076,837 1,620,631 1,784,700 164,069
ACS 7/1/2004 1 Year 122,824,501 1,747,664 1,866,000 118,336
ACS 7/1/2005 1 Year 124,711,041 1,886,540 1,980,900 94,360
ACS 7/1/2006 1 Year 126,500,212 1,789,171 2,068,800 279,629
ACS 7/1/2007 1 Year 128,132,164 1,631,952 1,831,600 199,648
ACS 7/1/2008 1 Year 129,313,137 1,180,973 1,370,200 189,227
ACS 7/1/2009 1 Year 129,969,653 656,516 999,700 343,184
Census 4/1/2010 9 Months 131,704,730 1,735,077 584,000 -1,151,077
Decennial Census Change: 15,800,257 16,445,600 645,343

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Lawler: Census 2010: Homeownership Rates by Selected Age Groups

Lawler: Census 2010: Homeownership Rates by Selected Age Groups

by CalculatedRisk on 8/31/2011 

Update from Lawler: Yesterday I gave some stats on the “states” with the highest and lowest shares of owner-occupied homes owned free and clear. Those %’s were incorrect; they were %’s for the % of ALL occupied homes owner free and clear. (My bad).

From economist Tom Lawler:

While Census has not released “Summary File 1” for the US as a whole, it has released such data for all 50 states plus DC. As such, aggregate US data from these files, including homeownership rates by selected age groups, can be constructed using the mathematical tools called “addition” and “division.”

Note the sizable declines in homeownership rates over the last decade in the 25-54 year old age groups!

US Homeownership by Age Group (Decennial Census)
1980 1990 2000 2010
15 to 24 years 22.1% 17.1% 17.9% 16.1%
25 to 34 years 51.6% 45.3% 45.6% 42.0%
35 to 44 years 71.2% 66.2% 66.2% 62.3%
45 to 54 years 77.0% 75.3% 74.9% 71.5%
55 to 64 years 77.6% 79.7% 79.8% 77.3%
65 years and over 70.1% 75.2% 78.1% 77.5%
Total 64.4% 64.2% 66.2% 65.1%

Here is a comparison of the decennial Census homeownership rates (which reflect April 1st) and the Housing Vacancy Survey (which are yearly average estimates). HVS data by age group only go back to 1982.

US Homeownership by Age Group (Housing Vacancy Survey)
1980 1990 2000 2010
15 to 24 years 15.7% 21.7% 22.8%
25 to 34 years 44.2% 47.1% 44.4%
35 to 44 years 66.3% 67.9% 65.0%
45 to 54 years 75.2% 76.5% 73.5%
55 to 64 years 79.3% 80.3% 79.0%
65 years and over 76.3% 80.4% 80.5%
Total 63.9% 67.4% 66.9%

While the decennial Census data show that the homeownership rates for all age groups save for “geezers” in 2010 were down significantly from 1990, the HVS data do not show the same declines. Census officials are unsure of why there are such large discrepancies, but most – though not all — feel that the decennial Census data are more accurate, and that there is “sumpin’ wrong” with the HVS data (the same is true for the HVS vacancy data), and not just for 2010, but for 2000 as well.

Some readers might be surprised at the sizable declines in the homeownership rates for younger householders from 1980 to 1990 – after all, they’ve been deluged with charts showing “aggregate” US homeownership rates over the last several years, but with little or no discussion of homeownership rates by age group. There was actually a fair amount written about the drop in younger householder homeownership rates from 1980 to 1990, with researchers attributing the decline to a number of factors – younger folks marrying later in life, job choices and labor mobility, and several other factors (I don’t plan to summarize the literature.)

Also from Tom Lawler: Number of Homes Owned Free and Clear

Here is a table derived from the decennial Census 2010 on the number of owner-occupied homes with a mortgage vs. those owned free and clear.

Owner-Occupied Homes (Census 2010)
Total 75,986,074
Owned with a mortgage or loan 52,979,430
Owned free and clear 23,006,644

Update: By state with correction:

% of OO Homes owned free and clear, 2010
US Total 30.3%
Alabama 36.6%
Alaska 31.2%
Arizona 27.9%
Arkansas 38.9%
California 22.3%
Colorado 22.3%
Connecticut 26.4%
Delaware 28.2%
District of Columbia 19.6%
Florida 33.0%
Georgia 25.6%
Hawaii 29.3%
Idaho 29.1%
Illinois 28.3%
Indiana 27.9%
Iowa 34.8%
Kansas 33.3%
Kentucky 35.9%
Louisiana 40.9%
Maine 33.5%
Maryland 21.2%
Massachusetts 25.8%
Michigan 31.3%
Minnesota 27.2%
Mississippi 41.5%
Missouri 31.5%
Montana 38.5%
Nebraska 33.7%
Nevada 21.4%
New Hampshire 27.5%
New Jersey 27.1%
New Mexico 37.7%
New York 33.0%
North Carolina 30.3%
North Dakota 42.9%
Ohio 30.0%
Oklahoma 37.7%
Oregon 28.2%
Pennsylvania 35.0%
Rhode Island 26.2%
South Carolina 33.9%
South Dakota 39.1%
Tennessee 34.1%
Texas 34.4%
Utah 23.7%
Vermont 31.9%
Virginia 25.3%
Washington 25.6%
West Virginia 47.7%
Wisconsin 30.3%
Wyoming 36.5%

CR Note: So, in 2010, about 30.3% of owner-occupied homes were owned free and clear. There will be much more on the 2010 Census data once the Summary File is released.

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HVS: Q2 Homeownership and Vacancy Rates

HVS: Q2 Homeownership and Vacancy Rates

by CalculatedRisk on 7/29/2011 02:53:00 PM

The Census Bureau released the Housing Vacancies and Homeownership report for Q2 this morning.

As Tom Lawler has been discussing (see posts at bottom), this is from a fairly small sample, and the homeownership and vacancy rates are higher than estimated in other reports (like Census 2010). This report is commonly used by analysts to estimate the excess vacant supply for housing, but it doesn’t appear to be useful for that purpose.

It does show the trend, but I wouldn’t rely on the absolute numbers.

Homeownership RateClick on graph for larger image in graph gallery.

The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate declined to 65.9%, down from 66.4% in Q1 2010.

From Tom Lawler:

The HVS has consistently overstated overall US housing vacancy rates, and consistently understated the number of US households – mainly “missing” millions of renter households – for over a decade. Census 2010 “found” 116,716,292 US households for April 1, 2010, 75,986,074 of which were owner-occupied households, and 40,730,218 of which were renter-occupied households.

While the HVS numbers don’t “correlate” all that well, a decent “best guess” for the US homeownership rate last quarter would probably be around 64.2%, or about the same as in 1990. Given the substantial aging of the population over the last two decades, that would imply that homeownership rates for most age groups last quarter were the lowest since the 1980’s.

CR note: we will get the Census 2010 age group homeownership rates soon.

Homeowner Vacancy RateThe HVS homeowner vacancy rate declined to 2.5% from 2.6% in Q1.

From Lawler:

The “homeowner vacancy rate” from the HVS last quarter was 2.5%, down from 2.6% in the previous quarter but unchanged from a year ago. The HVS homeowner vacancy rate in the first half of 2010 was 2.55%, compared to the decennial Census estimate as of April 1, 2010 of 2.4%.

Rental Vacancy RateLawler:

This survey also produced an estimated rental vacancy rate last quarter of 9.2%, down from 9.7% in the previous quarter and 10.6% in the second quarter of last year. The HVS estimate of the US rental vacancy rate for the first half of 2010 was 10.6%, compared to the decennial Census estimates as of Apri1 1, 2010 of 9.2%. Last quarter’s HVS rental vacancy rate was the lowest since the third quarter of 2002.

This report does suggest that the homeownership rate and vacancy rates are falling.

Here are some previous posts about some of the HVS issues by economist Tom Lawler:
• Census Bureau on Homeownership Rate: We’ve got “Some ‘Splainin’ to Do”
• Be careful with the Housing Vacancies and Homeownership report
• Lawler: Census 2010 and the US Homeownership Rate
• Lawler: Census 2010 Demographic Profile: Highlights, Excess Housing Supply Estimate, and Comparison to HVS
• Lawler: The “Excess Supply of Housing” War
• Lawler: Census Releases Demographic Profile of 12 States and DC: Confirms Bias of HVS
• Lawler: Census 2010 and Excess Vacant Housing Units
• Lawler: On Census Housing Stock/Household Data
• Lawler: Housing Vacancy Survey appears to massively overstate number of vacant housing units
• Lawler: US Households: Why Researchers / Analysts are “Confused”

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Goldman Sachs Lowers estimate of Excess Vacant Housing Supply

Goldman Sachs Lowers estimate of Excess Vacant Housing Supply.

by CalculatedRisk on 7/22/2011 04:27:00 PM

The current number of excess vacant housing units is a key piece of data for the housing market. Unfortunately available data is inconsistent.

Economist Tom Lawler has been arguing that many analysts are overestimating the vacant supply by using the HVS – and Lawler has been using the 2010 Census data to make his case. See: The “Excess Supply of Housing” War and Census 2010 Demographic Profile: Highlights, Excess Housing Supply Estimate, and Comparison to HVS

Lawler has also pointed out the most commonly used data for the homeownership rate appears incorrect. The Census Bureau agrees: Census Bureau on Homeownership Rate: We’ve got “Some ‘Splainin’ to Do”

Today Goldman Sachs lowered their estimate of the excess supply.

While the decennial census data are from the largest sample, we do not believe it is appropriate to ignore the other sources. …

With the 2010 Census results in hand, we would now say that excess vacancies in the housing market are 1.5 to 3.5 million units—a wide range, reflecting discrepancies in the available data.

Clearly though, the census results suggest the risks to our previous estimate of 3.5 million units are to the downside. … [A]t the current rate of housing production and with household growth of one million per year, it would take 5.1 years to clear 3.5 million units of excess inventory, but only 2.2 years to clear 1.5 million units of excess inventory.

A range of 2.2 years to 5.1 years to clear the excess inventory? We need better data!

Lawler thinks the excess supply is closer to the low end of that range.

Note: The Census Bureau is looking at the various data sources now, and is expected to provide analysis on the differences soon
.

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