Still Too Many Houses

House prices have risen in recent months after a long plunge, according to the National Association of Realtors and the S&P Case-Shiller national index. But a full-fledged housing recovery will remain elusive until the market can absorb all the houses and apartments that were built during the housing boom. And on that front, progress has been slow.

About one in seven housing units was vacant in the third quarter, according to the Census Department. This year has registered the highest reading since the government began collecting such data in 1965. Part of the glut comes from a rash of foreclosures as strapped borrowers fall behind on their mortgages.

Because twice as many people own their homes as rent, the total vacancy rate — 14.5% in the third quarter — exceeds the sum of the homeowner and rental vacancy rates. The rise in vacancies comes after a decade in which homebuilders, motivated by easy financing and rising prices, built many more homes than the U.S. needed.

Meanwhile, tax credits, mortgage modifications and government mortgage market support have helped slow the decline of house prices. Federal mortgage purchases have brought down 30-year mortgage rates by a third of a point, according to Wall Street estimates.

More than 350,000 Americans have used the $8,000 homebuyer tax credit to buy their first house, according to industry data. But because most of those buyers were presumably renters beforehand, their purchases filled one vacancy while creating another.