As homeownership rates reach to their highest levels in more than three years, agents and brokers are pouring over data to see what these shifts will mean to business in 2018.
According to the Quarterly Residential Vacancies and Homeownership report from the U.S. Census Bureau, homeownership rate remained statistically unchanged for the fourth quarter of 2017, edging up to 64.2 percent. This marked a slight increase from 63.7 percent one year ago. It also was up 0.3 percent from the previous quarter.
Zillow Senior Economist Aaron Terrazas pointed out that after bouncing around near 50-year lows for the past few years, the national homeownership rate finally seems to be gaining sustainable, meaningful upward momentum.
“The fourth quarter of 2017 was unseasonably strong, driven by buyers determined to make a deal in a highly competitive market. And for would-be buyers struggling to save for a down payment or figuring out how to make the monthly mortgage math pencil out, changes in the tax code that potentially put more money in their pockets could be the push they need to move out of an apartment and into a first home.”
According to the report, millennial homeownership rate increased from 35.6 percent to 36 percent. Among older generations, the homeownership is significantly higher at 75.3 percent for those aged 55 to 64 years and 79.2 percent for those aged 65 years and older.
Trulia Chief Economist Ralph McLaughlin pointed out that positive news for the housing market is that a large portion of the increase in the homeownership rate over the past year has come from 18 to 44-year olds.
“Increases in homeownership amongst these two cohorts are a sign that the scars of the Great Recession are finally starting to heal, and provide a source of optimism that the owner-occupied segment of the housing market will continue to grow throughout the remainder of this economic cycle.”
Among the non-Hispanic white population, the homeownership rate increased from 72.5 percent in the third quarter to 72.7 percent in the fourth quarter. However, homeownership rates for other ethnicities are much lower.
However, black homeownership dropped increased 0.1 percentage point, but remains far below average at 42.1 percent in the fourth quarter. The Hispanic homeownership rate saw the highest increase, rising .5 percentage points to 46.6 percent, according to the report.