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New Homeownership Hits Record 66.1 Million in Second Quarter

July 23, 1996|From Times Staff and Wire Reports

About 700,000 individuals and families became new U.S. homeowners during the April-June quarter, boosting the total number to a record 66.1 million, the Clinton administration said Monday.

Secretary of Housing and Urban Development Henry G. Cisneros said the 0.3% increase resulted in a 65.4% homeownership rate, a 15-year high.

"It's still the best investment people can make," Cisneros said in a telephone interview. "For most Americans, the largest source of net worth they have is tied up in the equity in their home."

Laura D'Andrea Tyson, chairwoman of President Clinton's National Economic Council, attributed the growth to the administration's economic policies that have cut the federal deficit by half while creating more than 10 million jobs.

"The president's strong deficit reduction has helped keep mortgage rates relatively low, even as the economy has strengthened and job growth has boomed," she told reporters in a telephone conference call with Cisneros.

Tyson acknowledged that rising mortgage rates are having an effect, but she said the rates have averaged 7.8% during Clinton's presidency, "a level we haven't seen since President Johnson occupied the White House" in the 1960s.

As a result, she said, "housing affordability will remain quite favorable."

Cisneros called the increase "a powerful engine of economic growth, creating jobs in the construction industry and in businesses that sell building supplies, appliances and home furnishings." He said the increase was broad-based and that 47% of all home sales since 1992 were by first-time buyers.

The homeownership rate in the second quarter was just 0.4% less than the 65.8% record set in the second quarter of 1980. Since January 1993, the number of homeowners has risen by 4.4 million.

The goal of the administration's National Homeownership Strategy is to create 8 million new American homeowners by 2000, for an ownership rate of 67.5%.

During the two years ended in June, the homeownership rate grew 1.6%, the fastest since the quarterly statistics were first compiled in 1965. It represented a 2.5%--or 3.3 million--increase in homeownership.

It included a 3-percentage-point increase in the Midwest, to 70.5%; 2 percentage points in the South, to 67.2%; and 1 percentage point in the Northeast, to 62.3%. The rate in the West was virtually unchanged at 59.8%.

The rate for whites rose 1.8 percentage point to 71.7%; for African Americans, 2 percentage points to 44%; for Latinos, 2.8 percentage points to a record high of 43.9%; and for all others, 1.9 percentage points to 50.4%.

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