During the boom, the only way first-time buyers, minorities and working families could afford to buy a home was through subprime and creative financing. Now that homeownership is affordable, new barriers to financing and competition with investors are locking them out of homeownership and changing the residential fabric of our communities from ownership to rental.

That’s the thesis behind a new study from New Vista Asset Management, a San Diego-based provider of real estate services for banks and other sellers of foreclosed residential homes.

New Vista found that over the past three years the percentage of REO homes sold to owner occupant buyers has decreased in 18 of the nation’s counties hit hardest by foreclosures.

“Although, quarter-by-quarter, we have observed some market-specific increases, over the entire period, owner occupancy rates for REO sales have broadly weakened,” said Brian Hurley, New Vista’s president and chief operating officer. “With eleven consecutive quarters of data, we can look beyond both seasonality and the temporary impact of demand stimuli such as the homebuyer tax credit, and observe a clear pattern of decline.”

Hurley added that the pace and scale of decline vary widely across markets. In Los Angeles County, California, for example, the New Vista data shows 79.36 percent of single-family REO houses were purchased by owner occupants in 2009, compared with only 60.32 percent in the third quarter of 2011. Most counties covered by the study saw declines of more than five percentage points during the same period, with a few dropping more modestly.

Only one county included in the Index, Wayne County, Michigan, had an owner occupancy rate for single-family REO sales below 50 percent in 2009. By the third quarter of 2011, owner occupancy rates for REO sales in an additional four of the studied counties had fallen below 50 percent, including Maricopa County, Arizona; Osceola County, Florida; Miami-Dade County, Florida; and Clark County, Nevada.

Owner-occupant buyers are losing out to investors for several reasons. Many REO sellers are choosing lenders paying with all cash over buyers in the process of securing financing. New lending standards, higher down payments and extended approval times all make it more difficult for owner-occupants, especially first-time buyers and minorities, to secure financing in a timely manner to compete for affordable

Formerly the executive in charge of the California market for Stewart Title, Hurley became concerned when we heard stories about potential homeowners consistently losing out to investors. “I’m very familiar with many HUD studies that show the importance of homeownership to communities,” he said.

Hurley said New Vistas is publishing its study to respond to a growing focus on investor-driven solutions to the nation’s residential real estate crisis. “Several initiatives now under consideration promise to channel more houses to investors rather than to owner-occupant purchasers,” Hurley observed. “We timed the first release of our study to raise awareness of the community impacts that current REO disposition practices are already having. Bulk sales, drop-bid foreclosure auctions and proposals under review by FHFA promise to move more REOs out of local real estate markets and out of the hands of owner occupants, out of the reach of local real estate professionals, and out of the capital base of the communities themselves. Before the market adopts new strategies to address an expected surge in foreclosure volumes, we wanted the owner-occupancy impact of current approaches to be well understood.”

Hurley has no “tipping point” ratio of ownership to rental, but he will continue track the competition for REOs between investors and potential owner-occupants in the initial 18 counties. He plans to expand the number of markets and issue quarterly reports.