Tag Archives: homeownership rate

Homeownership Down

4 Aug

The U.S. homeownership rate in the second quarter fell to its lowest point since 1995, and many experts say they expect it to drop even lower in the coming years as forward-looking mortgage interest rates rise and continue to impact home sale volume, a Zillow survey shows.

The seasonally adjusted homeownership rate fell to 64.7% in the second quarter, according to the Census Bureau, slightly lower than the first quarter’s rate of 64.8%.

This continued downward trajectory is attributed both to rising mortgage rates that impact mobility and home affordability, and to Millennials, who are increasingly delaying home purchases, experts suggest in the most recent Zillow Home Price Expectations Survey.

About 62% of survey panelists expected rising mortgage interest rates to have a “somewhat negative” or “significantly negative” impact on the number of home sales going forward.

On average, they expected interest rates on a 30-year, fixed-rate mortgage to reach 5.28% by July 2016. In comparison, the rate as of June 2014 averaged 4.16% for a 30-year, fixed-rate mortgage.

Survey panelists expected U.S. median home values to end 2014 up 4.6% to $177,895, on average, and to exceed their 2007 peak levels by the end of 2017, roughly a decade after the housing bust and ensuing recession began, Zillow says.

Home values are expected to show an annual increase, on average, between 3.7% and 5.6%, the survey’s experts predict.

“Although one would expect to observe trends like this in a calming housing market, it’s way too soon to conclude that the market has healed and returned to the old normal,” said Terry Loebs, founder of Pulsenomics LLC, an independent research firm that conducts the survey quarterly.

from this week’s RMD blog

Census Data Shows Decrease In Homeownership

16 May

Homeownership in the United States fell to its lowest rate in nearly a decade in 2014′s first quarter, according to new Census data , with older adults remaining the demographic with the highest rates.

The quarter’s 64.8% homeownership rate represents nearly 74.4 million households. That’s a four basis point drop from the previous quarter and a 0.2 percentage point decline from the same time last year.

The last time homeownership dropped beneath 65% was the second quarter of 1995, when it stood at 64.7%.

Homeownership rates peaked at 69.2% in 2004 and remained elevated until 2006, when they hovered around 69%. Since 2010, the homeownership rate has stayed between 65% to about 67%.

“The homeownership rate alone is hiding some of the housing recovery’s progress,” said Jed Kolko, chief economist at real estate website Trulia.

One potential reason for the decline in homeownership is an increase in renters. The rental vacancy rate dropped to 8.3% in the first quarter of 2014, down from 8.6% the previous year but a slight increase from the fourth quarter of 2013.

There are more than 40.3 million renters in the United States as of the first quarter, up 333,000 from one year ago. In contrast, the number of homeowners declined by about 90,000 during the same time period.

Homeownership is highest in the midwest, at 69.3%, and lowest in the West, at 59.4%. However, the West is the only region with an uptick in homeownership in the first quarter from 2013′s fourth quarter of 59.3%, and the Northeast, Midwest, and South all declined from the previous quarter.

Homeownership rates are highest among those aged 65 and older, at 79.9% in the first quarter. Only 36.4% of those 35 and under own homes. 

Data from the Census site can be found at the link below: