States with Biggest Homeownership Decline

The American Dream once was to own a home. However, after the financial crisis and the housing market bubble, people are hesitant to become homeowners.

The American Dream once was to own a home. However, after the financial crisis and the housing market bubble, people are hesitant to become homeowners, considering that renting might be better for them.

Some states were always more traditionally renters havens (like expensive California and New York). However, others with low home prices have also seen a decline in homeownership.

Bloomberg recently ranked the states and the District of Columbia based on the percentage point change in the annual homeownership rate from 2004 to 2012. Only occupied houses were included, which may explain why Michigan is all the way down at number 35.

Although, it’s not a state, the District of Columbia has the lowest overall homeownership at just 45%, which is only down 0.6% from 2004. The state with the highest ownership rate is West Virginia at 75.8% and it’s down from 80.3% in 2004.

Here are the top 10

— although with a three-way tie for ninth and a two-way tie for sixth, it's more the top 11 — states where homeownership is on the decline.

Foreclosure rates and median household income are from RealtyTrac. Median home prices are from Zillow.

9. (tied) Ohio

Homeownership rate 2012: 67%

Homeownership rate 2004: 72.2%

Change in rate: 5.2%

Unemployment rate April 2013: 7%

Foreclosure rate: 19%

Median home price: $107,200

Median household income: $47,358

Harvard Circle in Toledo

Unfortunately, Ohio had one of the smallest wage increases from 2001 to 2011 at just 2.34%. Plus, Toledo is the 14th biggest prospective housing bubble: housing prices are increasing, but so is unemployment.

9. (tied) Florida

Homeownership rate 2012: 67%

Homeownership rate 2004: 72.2%

Change in rate: 5.2%

Unemployment rate April 2013: 7.2%

Foreclosure rate: 27%

Median home price: $143,900

Median household income: $47,661

Sarasota

The Sunshine State has the second most seniors in the country, which might correlate to the state’s decline in homeownership, especially since it ranked 14th for the greatest concentration of senior poverty.

9. (tied) California

Homeownership rate 2012: 59.7%

Homeownership rate 2004: 54.5%

Change in rate: 5.2%

Unemployment rate April 2013: 9%

Foreclosure rate: 12%

Median home price: $383,300

Median household income: $60,883

One of the canals of Venice Beach. Photo by Roger Howard.

The only state with a lower homeownership rate than California is New York, although its homeownership rate was mostly unchanged (-1.2%) leaving it to land all the way down at number 41 — tied with Texas.

8. Virginia

Homeownership rate 2012: 67.8%

Homeownership rate 2004: 73.4%

Change in rate: 5.6%

Unemployment rate April 2013: 5.2%

Foreclosure rate: 5%

Median home price: $245,000

Median household income: $61,406

Alexandria. Photo by Zach Rudisin.

Virginia has the third largest wage increases, but not for low-wage workers — they are the third least upwardly mobile in the whole country. The unemployment rate is one of the lowest in the country, which is good since Virginia is the eight worst state for the unemployed.

6. (tied) Wisconsin

Homeownership rate 2012: 67.5%

Homeownership rate 2004: 73.3%

Change in rate: 5.8%

Unemployment rate April 2013: 7.1%

Foreclosure rate: 11%

Median home price: $159,900

Median household income: $51,598

Racine. Photo copyright Jeremy Atherton.

Workers in Wisconsin have one of the smallest wage increases of just 2.46% from 2001 to 2011. The state also has one of the lowest growths in GDP and population.

6. (tied) Colorado

Homeownership rate 2012: 65.3%

Homeownership rate 2004: 71.1%

Change in rate: 5.8%

Unemployment rate April 2013: 6.9%

Foreclosure rate: 5%

Median home price: $279,900

Median household income: $56,456

Telluride

Going hand in hand with the fact that Colorado is one of the most educated states is the fact that 19.1% of its consumers have student loan debt, which is among the highest in the country. The average student loan balance is $24,720 and 11% are 90-plus days delinquent. Given those facts, it’s not unsurprisingly that homeownership is on the decline.

5. Illinois

Homeownership rate 2012: 66.8%

Homeownership rate 2004: 72.7%

Change in rate: 5.9%

Unemployment rate April 2013: 9.3%

Foreclosure rate: 14%

Median home price: $199,000

Median household income: $55,735

Chicago from Lake Shore Drive.

Illinois’ unemployment is second only to Nevada’s. But despite that and the fact that it has one of the biggest declines in homeownership, Illinois has the fifth most million-dollar tax filers. Unfortunately, its low-wage workers are among the least upwardly mobile in the country.

4. Alabama

Homeownership rate 2012: 71.9%

Homeownership rate 2004: 78%

Change in rate: 6.1%

Unemployment rate April 2013: 6.9%

Foreclosure rate: 7%

Median home price: $115,000

Median household income: $42,081

Ashland Place in Mobile.

Alabama’s median household income is well below the national average of $51,914, but its foreclosure rate is much lower than some of the states on this list. However, Alabama recently received an ‘F’ for the financial literacy education provided to high school students.

3. Georgia

Homeownership rate 2012: 64.3%

Homeownership rate 2004: 70.9%

Change in rate: 6.6%

Unemployment rate April 2013: 8.2%

Foreclosure rate: 12%

Median home price: $143,900

Median household income: $49,347

Forsythe Park in Savannah.

It’s possible that Georgia’s homeownership decline has to do with the fact that it has one of the greatest concentrations of senior poverty and the state ranked 11th for most senior citizens, so they’re likely unable to keep their homes. The state also has one of the higher unemployment rates in the U.S.

2. Kansas

Homeownership rate 2012: 63.2%

Homeownership rate 2004: 69.9%

Change in rate: 6.7%

Unemployment rate April 2013: 5.5%

Foreclosure rate: 4%

Median home price: $135,000

Median household income: $49,424

Downtown Wichita

The good news is that Kansas has one of the lowest unemployment rates in the U.S., so the decline in homeownership isn’t due to people losing their jobs. However, for those who have jobs, Kansas has one of the smallest wage increases.

1. Nevada

Homeownership rate 2012: 55.7%

Homeownership rate 2004: 65.7%

Change in rate: -10%

Unemployment rate April 2013: 9.6%

Foreclosure rate: 28%

Median home price: $185,000

Median household income: $55,726

Henderson

Nevada has the highest unemployment rate in the country, which must make it difficult to buy and keep a home. However, the state is the second-best place to live in the U.S. if you’re a minimum-wage worker.