On Feb. 3, the U.S. Census Bureau released a report indicating that the number of vacant homes in the U.S. rose 6.7 percent during the fourth quarter of 2008, as compared to the same period in the previous year.

By the end of 2008, a record 19 million U.S. homes were empty and home ownership had reached the lowest point in eight years.

Of the 130.8 million housing units in the U.S. during the fourth quarter, 2.23 million were empty and for sale.

Vacancy Rate

The Census report said the vacancy rate was 3.5 percent in urban areas and 2.6 percent in suburbs. The Census Bureau also reported there were 4.1 million vacant homes for rent and 4.8 million vacant seasonal properties.

The report contains an "other" category, which includes most foreclosures, homes otherwise tied up in legal proceedings, and homes that are vacant while the owners renovate.

There were 7.8 million U.S. homes in this category in the fourth quarter of 2008.

Home Ownership Rate

Due in large part to the nationwide foreclosure crisis, the home ownership rate dropped to 67.5 percent. This low rate has not been seen since the first quarter of 2001.

As foreclosures drive home prices down, more homeowners who are upside down in their mortgages are likely to walk away.

Homes in Danger of Foreclosure

Norm Miller, director of real estate programs for the School of Business Administration at the University of San Diego, told Bloomberg approximately a third of homeowners who see their home values drop 20 percent or more below what they owe will let their mortgages go into foreclosure.

Miller points out that the foreclosure epidemic is propelling itself because as home prices decline, more people tend to walk away and prospective buyers are discouraged.

Obama's Moves

President Barack Obama has voiced that something must be done about the growing U.S. housing crisis, which has become deepest housing slump since the Great Depression.

To stem the surge of mortgage foreclosures, the Obama administration is considering government guarantees for home loans modified by servicers.

This proposal, geared towards protecting lenders from default if they work with borrowers, is likely to come at taxpayers' expense.

As the economic recession rolls into its second year and the nationwide unemployment rate continues to rise, Obama and lawmakers in Washington are scrambling to find ways to repair the housing market.

On Jan. 30, the Department of Commerce underscored the need for immediate action with a report indicating the U.S. economy shrank more during the fourth quarter of 2008 than it had since 1982.

Stay tuned to Total Bankruptcy for news as it develops.

Tags: Danger of Foreclosure, foreclosures, home