Homeownership rate continues to hover near 50-year low
Industry awaits spike in Millennial homeownership
Homeownership rates changed very little in the third quarter, and remain near lows not seen since 1965.
The homeownership rate decreased slightly from last year’s 63.7% to 63.5% in the third quarter, according to the latest report from the U.S. Census Bureau. This is up just 0.4 percentage points from last quarter.
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(Source: U.S. Census Bureau)
National vacancy rates for rental housing decreased to 6.8%, down 0.5 percentage points from last year and the same as the second quarter this year. The homeowner vacancy rate remained unchanged from last quarter and last year at 1.8% in the third quarter.
“Given other evidence from the release, my views swing more with the optimists than the pessimists,” Trulia Chief Economist Ralph McLaughlin said. “Household formation surpassed 1.1 million, climbing from 944,000 last quarter. About 560,000 - or nearly half - of these households were owners, up from a loss of 22,000 last quarter.”
“I think this is good news in light of the fact that millennials now make up the largest pool of potential new households,” McLaughlin said. “Though many are still living with their parents, they eventually will move out.”
“First, they will rent, and as they settle down, and then they will buy,” he said. “While we can’t know for sure they will own at rates of older generations, our survey work at Trulia shows 80% of Millennials want to own a home - the highest share of any cohort and the highest in the seven years we’ve run the survey.”
A chart from First American shows Millennials have a higher percentage of people with a college degree than any other generation. Historically speaking, homeownership rates are much higher among those with college degrees.