UDPATE 1-US 1st qtr homeowner vacancy rate falls to 2.6 pct

(Adds details, Feroli quote)

WASHINGTON, April 27 (Reuters) - The percentage of empty, privately owned U.S. homes fell slightly in the first three months of the year, the government reported on Wednesday, though vacancies remained at elevated levels as the housing sector continued to be weak.

The first-quarter homeowner vacancy rate fell to 2.6 percent from 2.7 percent in the fourth quarter of 2010, the Commerce Department said.

The rate was unchanged from the first quarter of 2010.

The residential rental vacancy rate rose to 9.7 percent in the first quarter from 9.4 percent in the prior three-month period. The rental vacancy rate was 10.6 percent in the first three months of 2010.

"Overall vacancies are still pretty close to their all-time high, so there is still a lot of excess supply out there," said Mike Feroli, chief U.S. economist at JP Morgan Chase.

The homeowner vacancy rate rose to 2.9 percent in the fourth quarter of 2008, while the rental vacancy rate rose to 11.1 percent in the third quarter of 2009.

The South had the highest vacancy rate in the first quarter, at 2.8 percent, followed by 2.7 percent in the Midwest. The rate for the West was 2.4 percent, while the Northeast recorded the lowest rate, at 2.2 percent in the first three months of the year, the department said. (Reporting by Corbett B. Daly; Editing by Padraic Cassidy)