Homeownership Rate Inches Up in 2Q

By Mark Lieberman

Managing Director and Senior Economist


  • Homeownership rate in 2Q 2018 was 64.3 percent, UP from 64.2 percent in 1Q;
  • 934,000 MORE households owned homes in 2Q 2018 than in 1Q, 2.2 million more than in 2Q 2017
  • 2,000 MORE vacant homes for sale in 2Q than in 1Q, but 38,000 fewer than in 2Q 2017

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The nation’s housing market remained essentially flat in the second 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, rose just 0.1 percentage points in the second quarter, an improvement from the first quarter but still well below the 65.3 percent average during the Obama Administration.

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 second quarter averaged 5.41 million (seasonally adjusted annualized rate) down from 5.54 million in 2017.

New home sales though averaged 646,000 in the second quarter, up from 615,000 in 2017.

New tax rules limiting the tax advantage of homeownership went into effect in January and existing home sales have fallen in four of the first six months of this year. New home sales have dropped in three of the first six months this year. (Since both are reported as “seasonally adjusted annual rates” the most recent reports are significant: for existing home sales 5.38 million in June, matching January as the weakest since last September; for new home sales: 631,000 in June, slowest pace since August 2017.)

An encouraging sign in the data was the uptick in homeownership rates by younger age cohorts. The homeownership rate among those under 35 rose to 36.5 percent (from 35.3 percent), its highest level since the end of 2013. The homeownership rate in the 35-40 age bracket rose to 60 percent (from 59.8 percent), its highest since 2Q 2014.

Those increases bucked a trend which saw younger families shunning homeownership for a variety of reasons. The lower percentages of homeownership among younger families were 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 and rising interest rates in addition to a new cap on tax breaks from owning a home.

According to Thursday’s report, the percentage of senior citizens (over 65) owning homes has fallen from 81.2 percent to 78.0 percent in the last five years.

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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