Is the Housing Slump Getting Worse? Probably.

Commerce Department data released last week revealed that the vacancy rate for ownership units in America had reached 2.8 percent, the highest it's ever been since the Census bureau adopted its current methodology in 1994.

The Commerce Department defines the often-overlooked statistic as the proportion of the homeowner inventory that is vacant and for sale. Not a bad barometer of the housing market--one out of reach of the often overly optimistic real-estate industry.

As Dean Baker, an economist at the Center for Economic and Policy Research and blogger for The American Prospect, points out, the vacancy rate had never before passed the 2 percent plateau until the fourth quarter of 2005.

You might assume that if more ownership units are vacant, that's because more people are renting. But rental unit vacancies are also up, to 10.1 percent from 9.5 percent in the same quarter a year ago.

Perhaps what's most puzzling is that at a time when unprecedented numbers of homes and apartments are sitting empty, the number of housing starts and building permits both posted surprising gains in March. Together, these figures would seem to suggest that the housing market has become burdened with ongoing overbuilding. Those expecting an upturn once elevated inventories clear may find themselves waiting a bit longer than they hoped.

by Robert Horning