Homeownership Rate Flat in 1Q

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homeownership rate in 1Q 2018 was 64.2 percent, UNCHANGED from 4Q but up from 63.6 percent in 1Q 2017;
  • 208,000 FEWER household owned homes in 1Q than in 4Q
  • 100,000 FEWER vacant homes for sale in 1Q than in 4Q

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The nation’s housing market remained flat in the first quarter the Census Bureau and Department of Housing and Urban Development reported Thursday.

The homeownership rate which had been growing from the first quarter through the fourth quarter a year ago hit a wall remaining at 64.2 percent. The rate, while still up from the 63.7 percent President Trump inherited from the fourth quarter of 2016, was though below the 65.3 percent average for all the Obama years.

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 of 2016.

According to the National Association of Realtors (NAR), sales of existing single-family homes in the first quarter averaged 5.51 million (seasonally adjusted annualized rate) down from the 5.54 million in 2017.

New home sales though averaged 668,000 in the first quarter, up from 617,000 in 2017.

Though the homeownership rate has come back, — it had fallen to 62.9 percent in 2Q 16 – it remains far below the 69.2 percent reached in 2Q 2006. One of the reasons is the change of preferences of younger families. From 2000 through 2010 and average of 54 percent of those aged 30-34 owned homes; since then an average of 47.1 percent of those in that age cohort were homeowners. The lower percentage could be directly attributed to the Great Recession when those 30-34 were watching their parents or their friends’ parents struggle in the mortgage meltdown. Since then, of course, while mortgages may have stabilized, that same age cohort has been saddled with student loans which make homeownership more of a dream.

According to Thursday’s report, the percentage of senior-citizens (over 65) owning homes has fallen from almost 81 percent to under 79 percent in the same period.

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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