Homeownership Rate Inches Up in 4Q As Seniors Can’t Sell

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homeownership rate improved in 4Q 2018 to 64.8 percent from 64.4 percent in 3Q;
  • Homeownership rate for older Americans – 65-plus – rose to 78.8 percent from 78.6 percent in 3Q;
  • 1.2 million MORE households owned homes in 4Q 2018 than in 3Q as fewer homes were listed for sale;

Trends

  • At 64.8 percent, the homeownership rate is at its highest level since 1Q 2014;
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With existing home sales faltering, according to the National Association of Realtors (NAR), the nation’s homeownership rate ticked up to the highest level in almost five as homeowners found themselves unable to sell.

While the number of housing units increased to accommodate a growing number of households, 

As the homeownership rate among seniors rose and for those in the 35-44 age cohort improved but the rate for those under 35 dropped. The 25-34 age cohort is considered prime homebuying years but that age bracket is also most likely to be saddled with a heavy student loan burden affecting the ability to purchase a home.

Senior and other older homeowners (the ownership rate for those 55-64 was 75.6 percent, up from 75.5 percent in the third quarter) may find themselves trapped as the median price of an existing home has slipped. The median price fell in six of the last seven months and is down almost 10 percent since June.

The home sales market was rocked with the tax changes enacted in December 2017 which capped the deductibility of mortgage interest as well as local real estate taxes, removing some of the tax advantages of homeownership.

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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