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Homeownership Rate Falls to 1995 Levels

National homeownership rates in the second quarter of 2014 fell to the lowest level since the second quarter of 1995, according to a July 29 report from the Commerce Department. The homeownership rate for individuals younger than 35 years of age was hardest hit, dropping to just 35.9 percent, down from pre-recession levels of more than 40 percent.
Photo: Commerce Dept./Mortgage News Daily

The rate of homeownership reached a 19-year low in the second quarter of 2014, according to a Commerce Department report. The seasonally adjusted homeownership rate fell to 64.8 percent during the quarter, down 0.1 percent from the first quarter and 0.3 points compared to the second quarter of 2013. The recent rate was the lowest for the statistic since the second quarter of 1995.

Homeownership peaked at 69.4 percent in the second quarter of 2004 and stayed within a range of 68.0 and 69.0 over the next 13 quarters before falling below 68.0 in the fourth quarter of 2007. While there have been quarterly ups and downs the homeownership rate has eroded at a fairly steady rate since then.

The rate of homeownership for persons under the age of 35 has maintained a steady decline since the recession, falling to 35.9 percent in the second quarter. The rate was about half of that for ages 45 to 54, and far below the 80.1 percent rate of Americans over the age of 65. As recently as 2008 and 2009, the homeownership rate for those under 35 was over 40 percent.

Homeownership was highest in the Midwest at 69.6 percent, 0.3 percentage points above the rate in the first quarter. The Midwest pace was the highest in the nation and up 0.2 points from one year earlier. The West
had the lowest rate, at 59.6 percent, compared to 59.4 percent in the first quarter and 59.4 percent in the
second quarter of 2013.

The rate in the Northeast was 62.1 percent, down 0.3 percent quarter over quarter and 1.1 percent from the same quarter the prior year. The South dropped from a 66.5 percent rate a year ago to 65.9 percent in the second quarter of this year. The rate in the first quarter was 66.5 percent.

The Commerce Department estimates that there were 133.21 million housing units in the U.S. in the second quarter, an increase of 467,000 units from Q2 2013. Of the total, 115.13 million units were occupied, 74.46 million by the owner and 40.67 million by a renter. In the previous quarter, 114.67 million units of the total housing stock were occupied, 74.53 million by owners and 40.14 million by renters. Vacant units totaled 18.08 million units in the second quarter of 2014.

Approximately 86.4 percent of all U.S. housing units were occupied in the second quarter while 13.6 percent were vacant. Owner-occupied housing units made up 55.9 percent of total housing units, while renter-occupied units made up 30.5 percent of the inventory. Vacant year-round units comprised 10.2 percent of total housing units, while 3.4 percent were for seasonal use. Vacant units that were held off market comprised 5.8 percent of the total housing stock.

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April 22, 2019, 5:40 pm PDT

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