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U.S. homeownership rate falls to 1965 level

Staff Writer |
Mortgage giant Freddie Mac said the average for the benchmark 30-year fixed-rate mortgage rose to 3.48 percent from 3.45 percent last week.

The average rate is down sharply from 3.98 percent a year ago. The 15-year fixed mortgage rate increased to 2.78 percent from 2.75 percent last week.

The low rates, along with a solid job market, have been bolstering the housing market as it recovers from the bust that began nine years ago. Americans bought new homes in June at the fastest pace in more than eight years, the Commerce Department reported Tuesday.

New-home sales rose 3.5 percent last month to a seasonally adjusted rate of 592,000, the best level since February 2008. Purchases of new homes have climbed 10.1 percent year-to-date, despite volatile sales on a monthly basis.

Still, the U.S. homeownership rate fell in the second quarter to match the lowest level on record in 1965, the year the U.S. Census Bureau started publishing the figures.

The homeownership rate in the April-June period was 62.9 percent, down 0.5 percentage point from 63.4 percent in the second quarter of 2015.

Affordability remains a problem and the potential for new-home sales to regain their historic average sales rate of 650,000 could be limited.

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