The number of Americans who own their home dropped to a new 20-year low last quarter as more households turned to renting.
According to figures released Thursday by the Census Bureau, the share of American homeowners hit 64.0 percent in Q4 2014, down from 64.4 percent in the previous quarter. Historical data shows the last time homeownership was so low was in Q4 1994, when the rate was 59.6 percent.
The rental vacancy rate, meanwhile, fell 0.4 percentage points to 7.0 percent on a combination of tighter supply conditions and a rise in demand as homeownership looks like a distant dream for some Americans. In a survey last month, Freddie Mac found 61 percent of adults living in rental housing don't plan to purchase a home within the next three years as housing costs and credit challenges keep them on the sidelines.
Making matters worse, rental prices continue to carry on strong, leaving renters with less in their bank accounts to save for the cost of buying a house.
Despite these challenges, analysts are confident that homeownership is at or near its bottom, meaning there's nowhere to go from here but up.
"[M]ortgage delinquency and foreclosure rates have fallen back to long-run norms, mortgage credit conditions are showing signs of loosening and wage growth may soon accelerate, helping young households to make the leap into homeownership," said Paul Diggle, property economist for Capital Economics, in a note.