Millennials this summer helped drive an increase in national homeownership rates, according to new data from the U.S. Census Bureau.
The U.S. homeownership rate bumped up to 64.4 percent in the third quarter, which is a half percentage point increase from the same period in 2017, the bureau reported.
First-time buyers spurred the growth, with Millennials — or those born between 1980 and 1995 — leading the way. Homeownership rates for people under the age of 35 grew to 36.8 percent in July, August and September from 35.6 percent in the third quarter of 2017, according to the bureau’s report.
“More people are choosing homeownership over renting, and a large part of that story is the historically large number of first-time home buyers,” said Tian Liu, Genworth Mortgage Insurance’s chief economist. “In the past two years, first-time home buyers have purchased at least 1.9 million homes each year. That is more than the pace of household formation over the same period, meaning that the transition from renting to owning is the more powerful driver of housing demand.”
The uptick in Millennial homebuying corresponds with a recent report from Bank of America showing a shift among the age group’s perspective on the importance of homeownership. The Homebuyer Insights Report indicates that nearly three in four millennials consider homeownership a top priority. In previous publications of the report, more Millennials stated they would prefer renting over ownership.
While the U.S. real estate market saw an increase in homeownership among Millennials, data shows other age groups dipped.
Homeownership rates among those between ages 35 to 44 fell from 60 percent in the second quarter to 59.5 percent in the third quarter of 2018, according to the Census Bureau report. Homeownership rates for people between the ages of 45 to 54 years old also dipped from 70.6 percent in the second quarter to 69.7 percent in the third quarter.
While overall homeownership rates increased, they still lag behind pre-Great Recession levels. In 2004, homeownership rates hit a record high of 69.1 percent and bottomed out at 62.9 percent in 2016.