Homeownership Rate Drops Again in 2Q; Second Straight Quarterly Decline

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homeownership rate SLIPPED to 64.1 percent in 2Q 2019 from 64.2 percent in 1Q 2019;
  • The number of homes for sale DROPPED by 46,000 from 1Q 2019 to 2Q 2019
  • Homeownership rate for younger Americans – 35 and under – ROSE to 36.4 percent in 2Q 2019 from 35.4 percent in 1Q 2019, first increase since 3Q 2018
  • 49,000 FEWER households owned homes in 2Q 2019 than in 1Q 2019.

Trends

  • The homeownership rate fell to its lowest level since 3Q 2017 (63.9 percent);
  • Homeownership rate is down 0.2 percent year-year — the first year-year decline since 1Q 2018;
  • Homeownership INCREASED only in the Northeast – to 61.2 percent in 2Q from 60.7 percent in 1Q.

Data Source: Census Bureau

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With all home sales remaining slow, according to both the Census Bureau and the National Association of Realtors (NAR), the nation’s homeownership rate fell again in the 2nd quarter to its lowest level in nearly two years.

The rate dropped 0.1 percentage points to 64.1 percent. The last time it was that low was 2Q 2017 when homeownership stood at 63.9 percent. Homeownership peaked in 69.2 percent in 4Q 2004.

Unlike the decline in 1Q which underscored the difficulties faced by younger families in buying homes, the 2Q decline was concentrated among older homeowners.

The homeownership rate for those over 65 fell to 78.0 percent in the second quarter from 78.5 percent in the first quarter and the ownership rate for those 54 to 65 fell to 74.8 percent in 2Q from 76.4 percent in 1Q. Conversely, the homeownership rate for those under 35 rose to 36.4 percent from 35.4 percent, still below a year ago when it was 36.5 percent. The rate for those 35 to 44 fell to 59.4 percent in 1 Q – the lowest level since 4Q 2017 when it was 58.9 percent.

The overall decline is consistent with drops in new and existing home sales. Existing home sales fell 1.7 percent in June and are down 2.0 percent from year-ago levels. While new home sales improved in June, they are off almost 7 percent from March

The total number of owner-occupied homes fell 49,000 in the second quarter, an improvement over the first quarter when owner-occupied home tumbled 797,000. According to Census figures, owner-occupied homes have declined for three straight quarters.

The number of vacant housing units held off the market – presumably because of price declines – increased to 7.7 million in the second quarter, the highest since 2Q 2014 (also 7.7 million).

Hear Mark Lieberman every Friday on the Morning Briefing on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @foxeconomics.

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