Homeownership Rate Highest Since 2013, Vacancy at Near 25-Year Lows

Highlights from the latest Housing Vacancies and Homeownership Data Release:

·      Homeownership rate increases to the highest level since 2013, growing to 65.1%.

·      Nearly 1.3 million new homeowners over the past year. Nine out of the past 11 quarters have seen growth of over a million.

·      Large jump in ownership rate of young households. Those under 35 have increased their rate by a full percentage point over the past year, growing from 36.5% to 37.6%

·      The black homeownership rate jumped 1.1 points, from 42.9% to 44% over the past year.

·      Also strong growth from Hispanic households, growing by 1.2 points. The homeownership rate for this demographic increased from 46.9% to 48.1%.

·      All of the increase in homeownership rate has come from households making below the median income.

According to the latest Housing Vacancies and Homeownership release from the U.S. Census Bureau, the homeownership rate jumped to 65.1% in the fourth quarter of 2019. This is up 0.3 percentage points from the fourth quarter of 2018. The increase was driven by a combination of very strong growth in owner households. What’s more, strong owner demand combined with low housing inventory is helping drive homeowner vacancy rates to lows not seen since the mid-1990s.

The fourth quarter of 2019 witnessed significant growth in new owner-households with an increase of nearly 1.3 million new owner-occupiers. Nine out of the past 11 quarters have now seen owner household growth surpass one million. At the same time, the number of new renter households increased by 150,000.

What’s more, the healthy demand for homeownership has helped bring down homeowner vacancy rates to levels not seen since 1994. While a sign of healthy demand for owner-occupancy, it is also an unfortunate consequence of underbuilding in the U.S. this economic cycle and one that surely represents a strong headwind for households looking to make the switch from renting to owning.