Home Ownership Rate At New Interim Low
Doug Short | Jul 29, 2016 01:06AM ET
Over the last decade the general trend has been consistent: The rate of home ownership continues to decline. The Census Bureau has now released its latest quarterly report with data through Q2 2016.
The seasonally adjusted rate for Q2 is 63.1 percent, down slightly from 63.5 in Q1. The nonseasonally adjusted Q2 number is 62.9 percent, below the Q1 number and at its interim low.
The Census Bureau has been tracking the nonseasonally adjusted data since 1965. Their seasonally adjusted version only goes back to 1980. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend.
The consensus view is that trend away from home ownership is a result of rising residential real estate prices in general and limited supply of entry level priced homes that would attract first-time buyers.
Homeownership Rates in Other Countries
The snapshot below gives us a crude comparison of the US homeownership rate compared to seventeen other countries. Our data source is a subset of the nearly four dozen countries in this Wikipedia entry on home ownership. We included the outliers at the top and bottom, Romania at 96.1% and Switzerland at 44.0%, as of 2014 and 2013, respectively.
The underlying factors in the chart above are quite complex: Residential real estate affordability, financing options, household income distributions, demographics and cultural values, to mention some of the more obvious.
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