Is Home Ownership Finally Rising?
One economic statistic that you probably haven’t seen much of in the press is the home ownership rate. Quietly, the percentage American families who own their own home (versus rent) has fallen to 62.9% in the second quarter of 2016—the lowest figure in 51 years, according to the U.S. Census Bureau. Young people are struggling to afford houses due to tight mortgage credit, and they’re also finding that it’s not easy to save for a down payment while paying off college loans. Contributing to the decline: a lack of new starter homes due to a construction lag following the Great Recession.
But there are reasons to believe that the rate may go up in the future. One is the formation of new households: 1.1 million in the third quarter, up from 944,000 in the three months ending in June. About half of the new households chose to be owners rather than renters, which could be due to skyrocketing rental rates around the country. For the first time since 2006, the home ownership rate went up in the quarter ending September 30, to 63.5%.