June 19, 2012 – Despite signs that home prices may be firming up or at least stabilizing, many in the real estate industry are concerned about the falling rate of home ownership across the United States.

Although not surprising given these economic times, the recent announcement by the U.S. Census Bureau that home ownership is at a 15-year low seems to indicate that whatever gains have been made over the past two years in eliminating distressed properties – and their dragging down the market – has not translated into more home owners. Reports of tight inventory and multiple-offer bidding are becoming increasingly common and should, in time, lead to price increases. Nevertheless, it appears that the number of successful transactions and the reduced inventory of available homes is not enough to compensate for the number of people who have foregone home ownership for various reasons.

In the first quarter of this year, the U.S. home ownership rate was 65.4 percent, down from 66.4 percent during the same time in 2011 and 66 percent at the end of last year. The high during the last housing boom cycle was 69.2 percent in 2004. Every region of the country saw a decline in home ownership during the first three months of this year. In the Western U.S. the rate was down to 59.9 percent – smallest in the nation – and the lowest point since 2006.

Analysts point to the fact that there are still 3.6 million home owners in delinquency or foreclosure. Until that number goes down, a higher rate of home-owning Americans will be hard to come by. While it is true that during much of the 1970s, 80s and 90s the rate of home ownership was in the mid-60 percent range, the fact that the rate is dwindling in a reportedly recovering economy has many in the housing industry campaigning for government reform when it comes to policies that impact the housing industry.

Earlier this month, 700 members of the home building industry visited lawmakers in Washington on a campaign to promote a legislative agenda designed to help increase home ownership. The key message to Congress was to increase the flow of mortgage money to the market by encouraging the passage of comprehensive legislation to reform the government sponsored housing enterprises Fannie Mae, Freddie Mac and the Federal Home Loan banks. These entities provide a federal backstop to ensure a reliable and adequate flow of affordable housing credit in all economic and financial conditions.

Members of the National Association of Home Builders (NAHB) were also promoting legislation to restore the flow of credit for new housing production by urging the House Financial Services Committee to consider H.R. 1755, the Home Construction Lending Regulatory Improvement Act. Sponsored by Reps. Gary Miller (R-California) and Brad Miller (D-North Carolina), the measure currently has 96 co-sponsors and would remove barriers to lending while preserving the regulators’ ability to assure the safety and soundness of the financial institutions they oversee. NAHB is seeking cosponsors for similar legislation in the Senate.

This group also campaigned to preserve current housing tax incentives that include the mortgage interest deduction and Low Income Housing Tax Credit, as the debate on tax reform continues in this election year.

The builder group championed several other issues on Capitol Hill that impact housing in a more indirect yet important way.

They asked for support for legislation to make key changes to the Environmental Protection Agency's Lead Repair, Renovation and Painting (LRRP) rule, including reinstating the opt-out provision to allow home owners without small children or pregnant women to decide whether to comply with the LRRP rule.

The NAHB asked lawmakers to co-sponsor House and Senate bills that would reduce the overreach of federal power under the Clean Water Act. It hopes to prevent the EPA and U.S. Army Corps of Engineers from finalizing or implementing their draft guidance that expands the reach of the Clean Water Act to include virtually every pond and seasonal runoff ditch in the nation.

With homeownership slipping, these initiatives are important in helping housing rebound – along with the nation’s general economic health that will give buyers the funds and confidence to jump into home ownership.

(Terry Ross, the broker-owner of TR Properties, will answer any questions about today’s real estate market. E-mail questions to Realty Views at terryross1@cs.com or call  562/498-1049.)