Everyone is aware that the housing market took a significant blow during the Great Recession of 2008, but the U.S. Census Bureau conducted the Current Population Survey/Housing Vacancy Survey on February 27, 2018. The outcome is not particularly positive, but the silver lining of all this is that from 2015 to 2017, it appears that homeownership rates for nearly all age ranges has increased by a few percentage points or remained the same. The only exception to this general trend can be found in the group of homeowners ages 45-54, with a slight decrease.
Unfortunately, the fact remains that the homeownership rates for all age ranges in 2017, is still below their 2006 levels; the year before the “Great Recession” (2007-2009). Specifically, homeowners aged 65+ have bounced back within approximately 2 percentage points of their 2006 levels. More bleak however, is the fact that homeowners younger than 44 are between 7 and 10 percentage points lower than their 2006 levels.
Home ownership rates have fluctuated over time due to naturally occurring phenomenon in the economy, including recession, varying interest rates, home prices, and other factors. Of note, the younger demographic is far less likely to own a home, partially as a result of several things that are no longer issues for their older counterparts such as student loans.
The Census Bureau has also released quarterly data on national homeownership rates in the United States beginning in 1995. The chart below will show that homeownership rates rose to an all-time high of 69.2% in the 2nd and 4th quarter of 2004. From the 4th quarter of 2004 through the 2nd quarter of 2016, homeownership rates were on a steady decline, reaching an all-time low of 62.9%. The good news is that homeownership rates appear to have been on the rise since the 2nd quarter of 2016. Absent unforeseeable changes in the housing market, given the upward trajectory of the economy, there doesn’t appear to be any reason to believe this trend will reverse itself any time soon.
The latest homeownership statistics, the 2nd quarter of 2018, further bolster the belief that the upward trend in homeownership will likely continue. Specifically, homeownership rates for individuals 65 and older is at a record high of 78%. On the other hand, homeownership rates for individuals under 35 years is at a record low of 36.5%. Ultimately, there are an infinite number of factors that may contribute to the abysmally low rates of homeownership rates of those 35 and under. As a general statement, however, the housing market appears to be on the mend.
At the Chernov Team we don’t just keep our finger on the pulse of housing markets in Studio City, we believe in doing our due diligence and keeping track of the housing market on the macro level as well. Remember, the person who comes to the table most prepared leaves with the most, and the Chernov team always leaves the table with the most.