- Q2 2020 homeownership rate jumped to 67.9%, highest rate since Q3 2008, according to US Census Bureau
- Low interest rates enabled more people to qualify for mortgages
- Homeownership for African Americans jumped from lowest rate ever recorded one year ago to highest rate since 2008
Lawrence Yun, chief economist with the National Association of REALTORS® (NAR), hit the bulls eye when he said, “Lower (interest) rates always do a magic trick of bringing more buyers into the housing market.”
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With the average interest rate for a 30-year fixed mortgage at an all-time low of 2.98% in mid-July, US homeownership rates rocketed to 67.9%, the highest level since Q3 2008. This homeownership rate of 67.9% overshadowed the rate of 65.3% the previous quarter, according to the US Census Bureau. (Since the Census Bureau had to suspend in-person interviews in favor of all telephone interviews to collect the homeownership data due to the COVID pandemic, data could be slightly off, the Census Bureau’s report noted.)
In addition to this almost 12-year high in overall homeownership rate, equally if not more important is what happened with the homeownership rates of African Americans and Latin-X Americans. Take a look:
- The homeownership rate for African Americans rose to 47%, the highest rate since 2008. Just one year ago, the rate of homeownership for African Americans was the lowest EVER.
- The homeownership rate for Latin-X Americans increased to 51.4%, the highest rate since 1994.
The lower financing costs go down, the more homeownership rates go up because more people are able to qualify for home mortgages. Usually, financing costs or interest rates and homeownership rates rise and fall at glacial paces. But, like everything else in this COVID reality, this pace of change for both homeownership and interest rates was lightening fast.
Obviously, with homeownership rates shining bright, US existing-home sales soared +21% in June, the highest monthly gain of home sales on record, according to NAR, after three consecutive months of declines.
Yun expressed surprise at the pace of these connected moves.
Thanks to the National Association of REALTORS® and HousingWire.