Homeownership Rate Inches Up in 3Q to Four Year High

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homeownership rate in 3Q 2018 was 64.4 percent, UP from 64.3 percent in 2Q;
  • 182,000 MORE households owned homes in 3Q 2018 than in 2Q, 1.9 million more than in 3Q 2017
  • 93,000 MORE vacant homes for sale in 3Q than in 2Q, 8,000 more than in 3Q 2017

Trends

  • At 64.4 percent, the homeownership rate is at its highest level since 3Q 2914;

 

Image result for homeownership

Despite ongoing weakness in home sales – both new and existing – the nation’s homeownership rate ticked up again in the third quarter, to the highest level in four years.

The increase came even though homeownership tax incentives were capped in the tax changes enacted by Congress last December, mortgage rates have increased, and income growth has been virtually nonexistent.

One contributing factor, ironically, has been the weak sales market which is keeping people in their homes even as a relatively small number of new buyers jump in.

While not the price bubble which burst ten years ago, the bump up in homeownership, without supporting fundamentals feels like another crisis in the making. With rates and other factors clogging the market, homeowners could find themselves trapped and unable to sell as rate increases outpace income growth.

At the same time, builders continue to add to inventory with new construction. Although much of the increase in housing permits and starts has come in multi-family activity, builders continue to build and add to inventory.

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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