The homeownership rate for the second quarter of the year was “not statistically different” from the rate recorded the previous quarter or a year earlier, according to the Census Bureau, which released its quarterly homeownership and vacancy report on Thursday. The notable change in homeownership over the quarter occurred among millennials.
“For the second quarter in a row, homeownership rates slipped for households 55 and up and gained for younger households, especially those under 35 who saw their rate reach 36.5 percent, its highest level in five years,” said Danielle Hale, Chief Economist at realtor.com in response to Thursday’s homeownership numbers.
The jump in millennial homeownership was also noted by Aaron Terrazas, Senior Economist at Zillow, who said that the millennial “home shopping spree” lead to a “bump in the overall homeownership rate in Q2.”
He considered that the current millennial homeownership remains “well below pre-crisis and pre-bubble norms, but those same groups are currently experiencing some of the biggest gains.”
This quarter’s 36.5 percent millennial homeownership rate compares to a rate of 34.1 percent a year ago.
Those ages 35 to 44 are also more likely to own a home now than a year ago. The homeownership rate for this age cohort rose from 58.3 percent a year ago to 60 percent in the second quarter of this year.
The overall homeownership rate for the second quarter was 64.3 percent, compared to 63.7 percent in the first quarter and 64.2 percent in the same quarter last year, according to the Census Bureau.
The rate was highest among older households—78 percent for those 65 years and older.
Homeownership was more common among non-Hispanic white households than among other races. The homeownership rate for non-Hispanic white households was 72.9 percent. For Asian, Native Hawaiian and Pacific Islander households, the rate was 58 percent, and for black households, the rate was 41.6 percent.
The homeowner vacancy rate was 1.5 percent in the second quarter, matching the rate of the previous quarter and the same quarter last year.
The rental vacancy rate was 6.8 percent, down from 7.3 percent a year ago but not statistically different from last quarter’s 7 percent, according to the Census Bureau.
Terrazas characterized rental household formation as “anemic for a fifth consecutive quarter,” which he said, “has contributed to softer rent growth nationwide.
After a decade of “renters accounting for almost all new households nationwide,” Terrazas said “that decade-long dynamic began to shift” in mid-2016.
However, “as interest rates rise and purchase affordability becomes more stretched over the next year, the pendulum could swing back toward more renter household formation,” he said.
Overall, 87.7 percent of housing units in the United States were occupied as of the second quarter, while 12.3 percent were vacant, according to the Census Bureau. About 56.3 percent of housing units were occupied by owners, while 31.3 percent were occupied by renters.
At 68.3 percent, the homeownership rate was highest in the Midwest. The South ranked second with a rate of 65.9 percent, and the Northeast and West followed with rates of 61.3 percent and 59.7 percent, respectively.
On August 23, 2018, MReport will host a webinar on the latest trends that are driving millennial homebuyers and how lenders can address their mortgage needs. An expert panel of speakers will give insights into the latest trends in housing and mortgage, and explore the role of digital lending channels to rethink business strategies for millennials. Click here to register today.