More Americans became homeowners in the first three months of the year, and the number of renters decreased, pointing to a shift back to ownership in the face of stiff headwinds in the housing market.
The homeownership rate was unchanged at 64.2% in the first quarter, the Census Department said Thursday. But it was higher than a year ago, when it stood at 63.6%.
And the rise in the January to March period marked the fifth straight quarter of yearly increases. “It really does lead me to believe this is a trend,” said Ralph McLaughlin, chief economist for Veritas Urbis Economics, who formerly held that position for real estate listings firm Trulia.
Analysts and industry participants have watched the homeownership rate, which hit a 50-year low in 2016, closely since the housing crisis.
Under normal circumstances, the number of renters and homeowners both increase at once, but with variations in the numbers. But the number of renters has fallen for four straight quarters now. “It looks like people are making a switch,” McLaughlin told MarketWatch.
The first-quarter jump was led by Americans under 35. Their ownership rate, 35.3% in the first quarter, was a full percentage point higher than a year ago.
Read: For Black History Month, a look at African-American home ownership
“Millennials have told us they want to be owners, but they’ve faced headwinds,” McLaughlin said. That transition has been “slow and steady but enough to make me think they’re making the switch from renting to buying. If they start buying homes en masse, the fact that they’re such a big cohort is going to have a ripple throughout the market.”
If they can find anything to buy, that is.
The homeowner vacancy rate ticked down to 1.5% in the first quarter, matching one other readings over the past year for the lowest vacancy rate since 2001. And evidences from real estate agents and others shows that homes are flying off the market as buyers turn out in force.
Courtesy of marketwatch.com and credit to Andrea
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