More homeowners join the ranks
More and more Americans are becoming homeowners — and younger generations are leading the charge. According to new data, owner households grew by more than 1 million last quarter, marking the eighth quarter in a row to see such growth.
The rate of homeownership keeps gaining
According to the recent Residential Vacancies and Homeownership report from the U.S. Census Bureau, the American homeownership rate has hit 64.8 percent. That’s up slightly both for the quarter and over the year and marks the eight-consecutive quarter of increases.
The gains are primarily due to younger buyers entering the scene. Americans under 35 now have a homeownership rate of 36.5 percent (up from 36 percent last year), while those between 35 and 44 boast a rate of 61.1 percent (up from just 58 percent.)
According to Ralph B McLaughlin, deputy chief economist at CoreLogic, “the future of homeownership in this country indeed looks bright.”
“American households, especially young households, are becoming confident enough in their financial and familial circumstances to take the plunge into homeownership, despite rocky outcrops of affordability and sparse inventory,” McLaughlin said. “This is good news for proponents of homeownership in the United States since young households represent the largest pool of potential homebuyers since their parents, the baby boomers, came of homebuying age over three decades ago.”
Millennial buyers are making up the biggest chunk of buyers in places in the Northeast and Midwest. In Pittsburgh, for example, they made up 57 percent of all home purchases last quarter, while in Provo, Utah, they made up 56 percent. Other spots where younger buyers are dominating include Rochester and Buffalo, New York, and Des Moines Iowa. Overall, homeownership rates are highest in the Midwest (69.3 percent) and South (66 percent).
In the meantime, the number of new renter households continues to decrease.
According to Census data, renter households dropped by 167,000 last quarter. The number has decreased in six of the last seven quarters.
“This suggests that the increase in the homeownership rates is at least partly due to households making a switch from renting to owning,” McLaughlin said. “What’s more, total household growth has topped 1 percent for five straight quarters, which is positive news for the housing industry at large. This streak represents the longest and largest magnitude of household growth in more than 12 years.”
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