Nearly 18 Million US Homes Stood Empty in Third Quarter 2007

A record 17.9 million U.S. homes stood empty in the third quarter as lenders took possession of a growing number of properties in foreclosure.

That’s up 7.8 percent from a year earlier, when 16.6 million properties were vacant, the U.S. Census Bureau said in a report Friday. About 2.07 million of the empty homes were for sale, compared with 1.94 million a year earlier, the report said.

New foreclosures have risen to a record, led by defaults in adjustable-rate loans to people with tainted or limited credit histories, according to the Mortgage Bankers Association.

Home-price declines and tougher lending standards are making it difficult for owners who fall behind in mortgage payments to sell or refinance into better loans.

Adjustable-rate mortgages to subprime borrowers account for 7.3 percent of all home loans and 44 percent of all new foreclosures, according to the Mortgage Bankers Association. Prime adjustable-rate loans, granted to borrowers with good credit, account for 15 percent of all mortgages and 15 percent of new foreclosures.

The U.S. homeownership rate fell for the fourth consecutive quarter, the longest decline since at least 1981.

The proportion of households that own their residences fell to 68.1 percent in the July-September period from 68.3 percent in the prior three months. The ownership rate reached a record 69.3 percent in 2004, up from 64 percent a decade earlier.

Homeowners accumulate wealth faster than renters, with median net wealth for owners at $184,400 in 2004, compared with $4,000 for renters, according to Federal Reserve figures.

KATHLEEN M. HOWLEY | Bloomberg News