The national homeownership rate dropped to a new 19-year low in the third quarter, sinking further as more Americans opted to rent rather than purchase a home.
According to a report [1] from the U.S. Census Bureau [2], the homeownership rate last quarter fell to 64.4 percent, down 0.3 percentage points from Q2 and nearly a full percentage point from the same quarter last year.
The last time homeownership in the country was this low was in the first quarter of 1995, when the national rate was 64.2 percent and rising. Except for minor bumps from time to time, the U.S. homeownership rate has fallen steadily throughout the housing crisis and recovery.
Paul Diggle, property economist at Capital Economics [3], said homeownership is likely to keep slipping.
"Our long-held position is that the homeownership rate will bottom out at 64 percent," he said, adding, "That said, tentative signs that cash-buyers and investors are starting to back away at the same time as first-time buyers are becoming more active mean that the floor for the homeownership rate is within sight."
As of September, first-time homebuyers have accounted for about 29 percent of existing-home sales [4] for three straight months, according to the National Association of Realtors. The group's historical data suggests first-time homeowners should make up about 40 percent of sales.
In recent years, more Americans have taken to renting, even as the costs outweigh homeownership [5]. According to the Census, the vacancy rate for rental homes was 7.4 percent for the third quarter, down from 8.3 percent last year.
In a small piece of good news, homeownership ticked up slightly among younger Americans, including the millennial age group that has so far avoided the market. The government estimates the homeownership rate among Americans 35 years old or younger was 36 percent in Q3, up from 35.9 percent in Q2—but still significantly down from 36.8 percent a year ago.
Homeownership was mostly down across the other age brackets, falling to 59.1 percent among Americans between the ages of 35 and 44, 70.1 percent between 45 and 54, and 80.0 percent for those 65 and older. Homeownership among those between the ages of 55 and 64 edged up to 76.6, its highest level since the second quarter of 2013.