In spite of bleak headlines saying homeownership evades their grasp, Millennials for the last two years have helped drive growing homeownership rates, according to new U.S. Census Bureau data.
Thanks in large part to people under 35, the U.S. homeownership rate grew to 64.8 percent in the fourth quarter of 2018, according to new U.S. Census Housing Vacancies and Homeownership data. It’s the eighth consecutive quarter of U.S homeownership growth, the report found.
Millennials represent a large, burgeoning buying force in homeownership, said Dr. Ralph B. McLaughlin, deputy chief economist for CoreLogic.
“American households, especially young households, are becoming confident enough in their financial and familial circumstances to take the plunge into homeownership, despite rocky outcrops of affordability and sparse inventory,” McLaughlin said. “This is good news for proponents of homeownership in the United States since young households represent the largest pool of potential homebuyers since their parents, the Baby Boomers, came of homebuying age over three decades ago. The future of homeownership in this country indeed looks bright.”
Households of 44 and under have experienced the largest increase in homeownership rates, McLaughlin said. Homeownership rates among those under 35 years old have bumped up from 36 to 36.5 percent, year-over-year. For those between 35 and 44, homeownership rates have boosted from 58.9 to 61.1 percent, according to the report.
It appears that more people switching from renting to owning are driving the growth in homeownership.
“From a technical standpoint, it’s because of strong owner-occupied household formation,” McLaughlin said of the homeownership growth. “The fourth quarter of 2018 was the fifth consecutive quarter that owner-occupied households grew by more than a million, at 1.7 million new owner households. At the same time, the number of new renter households either fell six out of the past seven quarters with a decrease of 167,000 households.”
Continuing the good news for the housing industry, total household growth has topped 1 percent for five consecutive quarters, which is the longest and largest magnitude of household growth in more than 12 years, McLaughlin said.