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U.S. homeownership rate continues to rise

The overall U.S. homeownership rate edged up in the third quarter, and the share of millennial-age buyers who own homes also rose. All this is good news for a market that has seen potential homebuyers squeezed by a combination of tight inventories, rising home prices and increasing mortgage rates.

“The fact that the homeownership rate is slightly up is an indication that for consumers housing remains very much on the table,” said George Ratiu, managing director of housing and commercial research for the National Association of Realtors.


The homeownership rate stood at 64.4 percent, both on a seasonally adjusted and unadjusted basis. That is up 50 basis points from a year earlier, and the second consecutive annual increase. The homeownership rate has generally been rising since 2015 after a nearly decade-long decline.

Another bright spot is the homeownership rate for people under the age of 35, which moved up again. The millennial homeownership rate jumped at the fastest pace among generational groups.The rate reached 36.8 percent, up 1.2 percentage points in the year. Ratiu said NAR surveys and the data on sales suggest that millennials view homeownership in the same way as past generations.

“I don’t think this generation, broadly speaking, is going to be that different,” Ratiu said during an interview. “To me, that is obviously a good sign.”

Ratiu said it remains unclear if the homeownership rate will keep increasing, however. He noted that the U.S. Census Bureau didn’t view the increase as statistically significant.

“Only time will tell,” Ratiu said. “For the time being, I view it as a sideways movement. There is a little upward curve to that homeownership rate from the 2016 trough, but how much higher is it going to go, some of that will have to depend on supply,” he added.

“Buyers may want to buy, but until there is enough inventory for that demand at the [affordable] price levels, that is the key. Builders have been building, but most of their product has been aimed at the luxury market.”

The third quarter also saw flat to declining homeownership rates among blacks and Hispanics. Black homeownership edged up marginally to 41.7 percent. The Hispanic rate fell for the third consecutive quarter to 46.3 percent. By contrast, the white homeownership rate increased for the second consecutive quarter to 73.1 percent, increasing the wide gap between the black and Hispanic rates. 


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