Zillow Inc (Z), Wells Fargo & Co (WFC), Bank of America Corp (BAC): The One Housing Statistic That’s Still Falling

Following the crisis, moreover, banks have become comparatively reluctant to underwrite purchase-money mortgages. In the first case, they haven’t needed to, given the robust refinancing business that boomed after mortgage rates dropped to historic lows. The statistics provided in Wells Fargo & Co (NYSE:WFC)‘s last earnings report illustrates this point. Of the $109 billion in mortgages that the bank underwrote in the first quarter of the year, upwards of 70% related to applications to refinance an existing mortgage as opposed to purchase a new home.

Beyond this, many lenders are still licking their wounds from the financial crisis. Bank of America Corp (NYSE:BAC) offers a case in point. Since assuming the monumental liabilities of Countrywide Financial in 2008, the nation’s second largest bank by assets has been forced to retreat from a number of previously lucrative underwriting markets, including those for correspondent and wholesale mortgages.

But America isn’t becoming a nation of renters
There’s nevertheless little reason to believe that the American psyche has been so damaged by the crisis that the dream of owning a home is now a relic of a bygone era.

A survey of economists conducted by Zillow Inc (NASDAQ:Z) last year showed that a majority of respondents — 56%, to be exact — expected the rate to be below 65.4% within the next five years — which, as I noted earlier, it already is. However, only one in five believe that it will fall below the 62.9% floor established in 1965.

As Gudell told me, “The desire to be a homeowner is deeply engrained in the U.S. consumers’ minds — it is [still] part of the American Dream.”

In sum, to refer back to the first chart in this article, the only conclusion that we can draw at this point is that the homeownership rate is reverting to its long-run average. It’s a cyclical statistics. As a result, one should expect it to go up and down. But while it’s headed lower now, at some point it will join its housing data brethren that are once again on the ascent.

The article The 1 Housing Statistic That’s Still Falling originally appeared on Fool.com and is written by John Maxfield.

John Maxfield owns shares of Bank of America. The Motley Fool recommends and owns shares of Bank of America and Wells Fargo.

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