A recent study has revealed that during the past 10 years, homeownership rates decreased from 69 percent in 2004 to an average of 63.4 percent in 2016. Apart from the overall average, certain groups experienced an even greater drop in homeownership rates. In age groups, there was a 10.9 percent decrease in homeownership by those in the 25 to 29 year-old age category. Ethnically, African-American homeownership dropped 7.6 percent, even as the total number of African American households increased by 2.7 million or 19.8 percent since 2005.
The study, Homeownership in Crisis: Where are we now? released on Monday was prepared by the Rosen Consulting Group (RCG) for the National Association of Realtors and the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley Haas School of Business. This is the first of three papers highlighting the important demographics and economic trends behind the recent decline in homeownership. The report also provides an assessment of the national housing outlook.
The report said that the overall outlook for increase in homeownership looks promising because of increasing job opportunities and moderate, but accelerating income growth. However, despite these positive factors, the future of widespread homeownership is dependent on making some improvements for a large millennial population, increasing minority households, and a growing number of single-parent and one-person households. Unless policies are created to provide access and affordability for these groups, the prediction is that low home ownership rates will continue nationally.
"Bolstering homeownership in a safe and sound way is not just about helping households secure financial stability, but may be the single most important factor in returning the United States to a path of robust economic growth," said Ken Rosen, Chairman of Rosen Consulting Group and UC Berkeley's Fisher Center for Real Estate & Urban Economics.
The report also measured the economic impact of this decline in homeownership, with RCG estimating that in 2016 "more than $300 billion would have been added to the national economy if the homebuilding industry had returned to a normalized level, representing a 1.8 percent boost to GDP.”
To view the full report, including additional impacts on GDP, click .