U.S. Loses Renter Households as Homeownership Trends Upward,
Rising wages, loosening credit standards and demographic shifts are all creating momentum for owning rather than renting.
The homeownership rate rose from the prior year for the fifth consecutive quarter in 2018, according to U.S. Census data released Thursday.
It held steady at 64.2%, unchanged from the prior quarter and its highest level since 2014. The share of Americans who own a home rose from the prior year, from 63.6% in the first quarter of 2017.
The homeownership rate rose last year for the first time in 13 years. That marked a turning point in the recovery, during which home prices have risen sharply and credit standards were initially very tight, blocking many renters from buying homes.
The U.S. added 1.3 million owner households over the last year and lost 286,000 renter households, the fourth consecutive quarter in which the number of renter households declined from the same quarter a year earlier. That could pose challenges for apartment landlords, who are bracing this year for one of the largest infusions of new rental supply in three decades.
Landlords should start to take caution,” said Ralph McLaughlin, chief economist and founder of Veritas Urbis Economics, a consulting firm. “There’s going to be downward pressure on rents in the near future.”
Rising wages and looser credit standards have helped bolster demand for homes in the last year. Fannie Mae made it easier for borrowers to take on more debt in the middle of last year, which coincided with a significant rise in the homeownership rate.
Demographics trends also increasingly favor homeownership, as members of the large millennial generation are entering their early to mid 30s, when people typically marry, have children and purchase their first home.
Nonetheless, challenges remain. Rising interest rates this year were expected to dampen demand for homes this year. The rate for a 30-year, fixed-rate mortgage hit 4.58% this week—the highest level since August 2013, according to data released by Freddie Mac on Thursday.
Limited inventory and rising prices are also making it difficult for
young people to buy their first homes, as they compete in fierce bidding wars and often lose out to downsizing baby boomers or investors able to pay cash or make large down payments.
A lack of homes for sale is also creating challenges for would-be buyers. The homeowner vacancy rate declined to 1.5% from 1.7% a year earlier, according to the Census data. That is down significantly from the recent peak of 2.8% during the housing bust in 2008 and close to the level seen in the early 1990s, according to Tian Liu, chief economist at Genworth Mortgage Insurance.
Ready to Buy or Sell? We have a wealth of information to help you get started visit Precision Realty & Assoc. LLC or if you prefer a more personal touch, reach out to a us, CALL 801-809-9866 today.
#RealEstateForSale #Homeownership #UtahRealEstate #Rental
The homeownership rate rose from the prior year for the fifth consecutive quarter in 2018, according to U.S. Census data released Thursday.
It held steady at 64.2%, unchanged from the prior quarter and its highest level since 2014. The share of Americans who own a home rose from the prior year, from 63.6% in the first quarter of 2017.
The homeownership rate rose last year for the first time in 13 years. That marked a turning point in the recovery, during which home prices have risen sharply and credit standards were initially very tight, blocking many renters from buying homes.
The U.S. added 1.3 million owner households over the last year and lost 286,000 renter households, the fourth consecutive quarter in which the number of renter households declined from the same quarter a year earlier. That could pose challenges for apartment landlords, who are bracing this year for one of the largest infusions of new rental supply in three decades.
Landlords should start to take caution,” said Ralph McLaughlin, chief economist and founder of Veritas Urbis Economics, a consulting firm. “There’s going to be downward pressure on rents in the near future.”
Rising wages and looser credit standards have helped bolster demand for homes in the last year. Fannie Mae made it easier for borrowers to take on more debt in the middle of last year, which coincided with a significant rise in the homeownership rate.
Demographics trends also increasingly favor homeownership, as members of the large millennial generation are entering their early to mid 30s, when people typically marry, have children and purchase their first home.
Nonetheless, challenges remain. Rising interest rates this year were expected to dampen demand for homes this year. The rate for a 30-year, fixed-rate mortgage hit 4.58% this week—the highest level since August 2013, according to data released by Freddie Mac on Thursday.
Limited inventory and rising prices are also making it difficult for
A lack of homes for sale is also creating challenges for would-be buyers. The homeowner vacancy rate declined to 1.5% from 1.7% a year earlier, according to the Census data. That is down significantly from the recent peak of 2.8% during the housing bust in 2008 and close to the level seen in the early 1990s, according to Tian Liu, chief economist at Genworth Mortgage Insurance.
Ready to Buy or Sell? We have a wealth of information to help you get started visit Precision Realty & Assoc. LLC or if you prefer a more personal touch, reach out to a us, CALL 801-809-9866 today.
#RealEstateForSale #Homeownership #UtahRealEstate #Rental
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