U.S. Homeownership Rate Jumps From 50-Year Low
July 27 2017 - 02:28PM
Dow Jones News
By Laura Kusisto
The U.S. homeownership rate climbed in the second quarter, a
signal that the sharp downward spiral that began after the housing
crash is finally reversing.
The homeownership rate hit 63.7% in the second quarter, the
Census Bureau said, a jump of nearly a full percentage point from a
year ago, when it touched a 50-year low of 62.9%. The share of
Americans who own homes has climbed steadily since then.
The homeownership rate also edged up from the first quarter,
when it sat at 63.6%.
"The damage the [2007-09] great recession has done to the
homeownership rate is likely reversing course," said Ralph
McLaughlin, chief economist at home tracker Trulia.
The quarterly reports can be volatile, but several factors point
to sustained improvement. The number of new-owner households
exceeded new renter ones for the second consecutive quarter. Some
1.26 million new-owner households have been formed since the second
quarter of 2016, while there are 702,000 fewer renter households
than there were a year ago, according to the Census.
There are now more homeowners in the U.S. than any time since
2009, according to Svenja Gudell, chief economist at Zillow.
That doesn't bode well for apartment landlords, who are battling
a flood of new supply that is pushing vacancy rates up and keeping
rent growth tepid in many parts of the country.
The national vacancy rate climbed to 4.4% for the quarter from
4.2% a year earlier, according to data provider Reis Inc.
"As the rental market becomes more saturated and vacancies keep
climbing, there is some hope that builders may begin to re-focus
their attention on the for-sale segment, a potential boon for those
renters that likely want to buy, and would if they could, but
haven't been able to find the right home for them given incredibly
tight inventory," Ms. Gudell said.
Nonetheless, the trend is good news for the housing market and
the U.S. economy overall, given the boost that new-home
construction provides. Builders are likely to continue ramping up
production of starter homes in response to increasing demand from
millennials.
The homeownership rate for households headed by someone under 35
years old climbed to 35.3% in the second quarter, up from 34.1% a
year earlier.
Increasing demand is likely to put additional upward pressure on
home prices unless there is more supply to meet it. There is
evidence that builders are beginning to step up. Housing starts
rose 8.3% in June from the previous month to a seasonally adjusted
annual rate of 1.215 million, the Commerce Department said last
week.
Write to Laura Kusisto at laura.kusisto@wsj.com
(END) Dow Jones Newswires
July 27, 2017 14:13 ET (18:13 GMT)
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