Household formation in the final quarter of 2017 has been the highest since 2015, with 1.1 million new households added to the U.S. housing industry as the year wound down. A comparison with last year’s Q4 shows an increase of 1.44 million households, up 1.2 percent. According to a new Zillow report, these households are mostly comprised of homeowners, and many of them are headed by someone under the age of 35.
The number of homeowner households increased 1.4 percent over Q3 2017, with 1.04 million new households reported by U.S. Census Bureau. Compared to Q4 2016, that increase was 1.52 million new homeowner households and a 2 percent rise. Although there was a slight increase of 61,000 (up 0.1 percent) in renter households for the last quarter, they have been decreasing consistently over the previous three quarters, mimicking the quarterly declines at the end of 2004 and early 2005.
The report indicated that the trend in homeownership is also shifting by age, with the amount of homeowners under 35 increasing 36 percent in Q4 2017, up 0.4 percent over Q3 2017. The year-over-year increase was 1.3 percent, which is the highest since 2004. Also, homeowners aged between 35 and 44 increased 0.2 percent yearly, homeowners aged 45 to 54 declined of 0.3 percent, homeowners aged 55 to 64 increased 0.5 percent, and homeowners aged 65 and older dropped 0.3 percent.
The top five cities posting a surge in homeownership were Columbus, Ohio (up 5 percent to 61.3 percent); Orlando, Florida (up 4.3 percent to 63 percent); San Antonio, Texas (up 4.1 percent to 67.1 percent); Cincinnati, Ohio (up 3.9 percent to 64.8 percent); and Phoenix, Arizona (up 3.9 percent to 67.3 percent). However, the most declining cities are Baltimore, Maryland (down 4.6 percent); Denver, Colorado (down 4.5 percent); Riverside, Iowa (down 3.4 percent); San Francisco, California (down 2.9 percent); and Boston, Massachusetts (down 2.8 percent).