World Economic

The rate of homeownership in the U.S. may fall in coming years as households rebuild equity wiped out by the worst slump since the Great Depression, according to a study by economists at the Federal Reserve Bank of New York.

“The official homeownership rate will likely experience significant downward pressure in the coming years,” Andrew Haughwout, Richard Peach and Joseph Tracy wrote in a paper posted on the bank’s Web site. Owners whose mortgages are larger than the properties are worth “very likely will convert officially to renters,” assuming prices don’t climb in the next several years, they said.

U.S. homes have lost about $5.9 trillion in value since the market’s peak in March 2006 as mounting foreclosures and the recession weighed on prices, according to Zillow sam day payday loan.com. The homeownership rate peaked at 69 percent in 2006 and has since dropped to 67.3 percent, a level not seen since 2000, the authors wrote.

A drop in homeownership would have broader implications for the economy, boosting the national savings rate, they said.

Foreclosure filings in the U.S. are set to climb to a record for the second consecutive year with 3.9 million notices sent to homeowners in default, RealtyTrac Inc. said this month. This year’s filings will surpass 2008’s total of 3.2 million as record unemployment and price erosion batter the housing market, the Irvine, California-based company said.

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