Is the tide turning? The homeownership rate rallied slightly at 63.5 percent in the third quarter, higher than the 62.9 percent rate in the second quarter—the lowest point in more than 50 years, according to the U.S. Census Bureau’s Quarterly Housing Vacancies and Homeownership report. The third quarter homeownership rate did not differ considerably from last year’s third quarter, however, at 63.7 percent.
On inventory, roughly 87 percent of housing was occupied in the third quarter, with 55.5 percent owner-occupied and 31.9 renter-occupied.
The Midwest saw the highest homeownership rates in the third quarter at 68.6 percent; the West saw the lowest, at 58.2 percent.
Homeownership rates in the third quarter were also highest among homeowners aged 65 and older, at 79.0 percent, and lowest for homeowners aged 35 and younger, at 35.2 percent.
Non-Hispanic white homeowners held the highest homeownership rate in the third quarter, as well, at 71.9 percent. Asian or Native Hawaiian and Pacific Islander homeowners held the second-highest rate at 55.6 percent. Hispanic homeowners held the third-highest, at 47.0 percent. Black homeowners held the lowest rate, at 41.3 percent—though both the Hispanic and Black rates were higher than those of last year’s third quarter.
The homeowner housing vacancy rate came in at 1.8 percent in the third quarter, while the renter vacancy rate reported 6.8 percent. Homeowner vacancy rates were highest outside metro areas at 2.5 percent, followed by inside principal cities at 1.9 percent and in suburban areas at 1.5 percent. Renter vacancy rates mirrored those of homeowners: highest outside metro areas at 9.6 percent followed by inside principal cities at 6.9 percent and in suburban areas at 6.0 percent.
The median list price of vacant for-sale housing in the third quarter was $157,500.
“Optimists and pessimists alike have fodder for their cause,” wrote Trulia Chief Economist Ralph McLaughlin. “On the optimist’s side, household formation—whether it’s from new renter or new owner households—is good for both the housing market and the general economy, as some renters eventually become owners and new households drive demand for home-related goods and services. On the pessimist’s side, there are headwinds for those that want to own a home, but can’t: prices and rents have outpaced incomes, credit standards are higher, and a high share of young households are still living with their parents.
“Given other evidence from the release, my views swing more with the optimists than the pessimists.”
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