Housing Study Raises Concerns
Tuesday, June 27th 2000, 12:00 am
By: News On 6
BOSTON (AP) â€” America's homeownership rate reached a new high last year, but rising prices are keeping the poor out of the market, a new study says.
In 1999, 66.8 percent of Americans owned their own home, up from 66.3 percent in 1998, according to a Harvard University report.
But those seeking to buy homes are facing higher prices and, over the last year, higher interest rates, leaving many behind.
``The red-hot economy has done little to relieve the housing problems of low-income households,'' the annual report says.
The price of homes rose faster last year than the general inflation rate for the sixth straight year. Inflation-adjusted prices have increased 11 percent since 1994.
But the thriving housing market has done little to narrow the gap between minority and white homeownership rates, according to the report.
``The traditional premise used to be that if you work you could afford a decent place to live,'' said Nicolas P. Retsinas, director of Harvard's Joint Center for Housing Studies. ``In many housing markets, you can work, you can work hard, you can work long, and you still won't find a decent place to live.''
Homeownership rates for whites increased from 70 percent to 73.2 percent. For blacks the rates rose from 42.5 to 46.7 percent, and for Hispanics from 41.2 to 45.5 percent.
There are almost 1 million more black homeowners today than five years ago, the study said.
In general, this year's report was more cautious than last year's, warning that recent rises in interest rates would inevitably cool the market. That may already be happening â€” housing starts dipped 3.9 percent between April and May.
But the report also expressed concern that an opportunity to improve the housing conditions of the poor is being squandered.
Nationwide, rents rose faster than inflation for the third straight year. Since 1996, rents have exceeded the general rate of inflation by about 1 percent a year. Portland, Ore., San Francisco and Seattle had record rents last year, and rents in the Northeast approached their highs from the late 1980s.
Among the study's other conclusions:
â€” Between 1995 and 1998, the value of primary residences rose from $7.8 trillion to $9.4 trillion.
â€” Only three metropolitan areas â€” Miami and Buffalo and Rochester, N.Y. â€” experienced real price declines.