Homeownership Rate Edges UP in 2Q; Household Formations Slow; Homes for Sale Fall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homeownership rate in 2Q 2017 was 63.7 percent, UP from 63.6 percent in 1Q and 62.6 percent a year ago;
  • 160,000 more household owned homes in 2Q than in 1Q
  • 91,000 FEWER vacant homes for sale in 2Q than in 1Q
  • 277,000 FEWER households at end of 2Q than 1Q

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The nation’s housing market improved slightly in the second quarter with an increase in the homeownership rate, the Census Bureau and Department of Housing and Urban Development reported Thursday.

The homeownership rate has been moving sideways in a relatively narrow range for the last years, as high as 63.7 percent and as low as 63.5 percent.  The report noted a sharp, 28.0 percent, increase in the number of rentals suggesting a change in the “American Dream: of homeownership.

The homeownership rate peaked at 69.2 percent in 2004 and dropped to a 48-year low of 62.9 percent in the second quarter last year.

The National Association of Realtors (NAR) reported another drop in sales of existing single-family homes in June, the third month-month decline this year while the government reported a slight uptick in the sale of new homes for the same month. The NAR data tracks closings while the government reports on contracts for sale.

The decline in the number of households means there might be fewer buyers of homes – new or used – and continues to reflect a trend of millennials struggling to strike out on their own either because they can’t find jobs or because the jobs they do find make living on their own, as a new household, a financial challenge. The decline in the number of homes for sale also points to a weaker housing market.

As the report Thursday also showed a decline in the inventory of homes for sale, it also showed an increase the number of units available for rental, another reflection of changing attitudes toward 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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