US Homeownership falls in first quarter of 2016
The United States Census Bureau just reported that for the first quarter of 2016 US homeownership actually fell to 63.6%! As a comparison, the homeownership rate it a high of 69 4.4% in 2004 during what many consider the biggest housing boom in US history.
Currently the US homeownership rate is now only 1/10 of one basis point higher than the all time low heat in the second quarter of 2015!
Many economists, a usual have widely varying opinions why the homeownership rate is falling in the United States. Some economists actually blame our current housing recovery which they claim has overheated home prices especially those here in Southern California.
Another reason economist mention as having it direct affect on low homeownership rates are the high levels of student loan debt as well as the fact that in the wake of our housing market bust, today mortgage underwriting standards are much tougher.
It’s a little hard for me to sympathize with the economist pointing to tougher standards for mortgage underwriting as a cause for lower homeownership. Sure, it’s true that today you really have to provide documentation to show that you can actually afford a home ownership. But, when we had loose underwriting, in the industry referred to as liar loans obviously the homeownership bumped up, but we all know the tragic outcome on basing homeownership on wants or needs or dreams versus actual affordability.
Currently homeownership for people age 25 through 34 is almost 10% lower than it was a decade ago! Also, first-time homebuyers are approximately 30% in today’s market. Traditionally first-time homebuyers usually compromise 40% of homebuyers.
Another factor affecting the US homeownership rate that is not often mentioned, is that a lot of younger people today do not want to feel settled down with a home mortgage payment that they feel would dramatically change their lifestyles. So just as we’re seeing a shift in millennial’s marrying and having children later in life, there also putting off homeownership.
Even though household formations in the United States is increasing two thirds of new household formations is on the rental side, just one third of new households are owner occupied homes.
Today in the United States homeownership is the highest in the Midwest and naturally because of very pricey housing lowest in the West.
Click Here to view the Census Bureau report
