US homeownership rate hits multi-year high, buoyed by young buyers

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In a sign of good news for the housing market, the homeownership rate inched up to its highest level in almost five years in the fourth quarter, according to data released this week by the U.S. Census Bureau.

The percentage of individuals who owned homes climbed to 64.8 percent, up from 64.2 percent during the same period in the year prior. The homeownership rate had not been that high since the first quarter of 2014.

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Last quarter’s increase also marked the eighth consecutive quarter of year-over-year gains.

Ownership rates in the fourth quarter were the highest in the Midwest – at 69.3 percent, followed by the South at 66 percent. They were lowest in the West, at 60.9 percent.

Americans older than 65 were more likely than any other age group to own their home, at 78.8 percent. However ownership rates among those under 35 were higher than the fourth quarter of 2017 as more millennials look to buy homes.

According to data from CoreLogic, those under the age of 35 saw homeownership rates increase to 36.5 percent, from 36 percent, over the past year. Those between the ages of 35 and 44 saw rates increase to 61.1 percent, from 58.9 percent.

Gains come in spite of unfavorable conditions facing prospective buyers in the housing market, including low inventory and high prices.

Additionally, younger Americans have another challenge in the form of mounting student loan debt. Researchers from the Federal Reserve found that the homeownership rate fell among this demographic alongside a rise in student debt.

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Nevertheless, the latest data reveals a promising shift away from renting and toward ownership. CoreLogic noted that while 1.7 million new owner-occupied households were formed in 2018, new renter households fell by 167,000.

Source: Fox Business

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