Homeownership Rate Jumps as Millennials Step Up Buying

Rental vacancy rates at 34-year low

By Frank Nothaft Property Rental, Real Estate

According to the latest Housing Vacancies and Homeownership release from the U.S. Census Bureau, the homeownership rate jumped to 65.1% in the fourth quarter of 2019, the highest in six years. The number of homeowners jumped 1.3 million during 2019, adding 0.3 percentage points to the ownership rate. What’s more, the U.S. rental vacancy rates dropped to 6.4%, the lowest since mid-1985.

Figure 1: Strong Growth in Owner Households Pushes Up Homeownership

The homeownership rate for 25-34-year-olds jumped from 36.5% during the fourth quarter of 2018 to 37.6% in the final three months of 2019. Owner rates were up in all age categories during the year, except for 35-44-year-olds. Millennials outnumber the tail-end of the Generation X cohort, and thus do more than offset the dip in ownership by 35-44-year-olds. The Census also reported homeownership rates for black and Hispanic households jumped by more than one percentage point between the end of 2018 and the end of 2019.

Figure 2: Rental Vacancy Rates Lowest Since 1985

What’s more, rental vacancy for single-family and multifamily homes both declined during 2019. The overall rental vacancy rate for the United States fell to 6.4% in the fourth quarter – from October through December 2019 – the lowest since the second quarter of 1985. Vacancy rates for one-family rental homes dipped to 5.2% and by the fourth quarter of 2019, rates for two-or-more family homes fell to 7.4%. Low vacancy rates push up shelter costs. This can be seen in the CoreLogic Single-Family Rent Index which reported a 3% increase in single-family rents for the 12 months ending November 2019.

© 2020 CoreLogic, Inc. All rights reserved.