Homeownership at 19 Year Low

The rate of homeownership in the U.S. continued to slide in the second quarter of 2014, reaching a 19 year low. The Commerce Department said that the seasonally adjusted homeownership rate fell to 64.8 percent during the quarter, down 0.1 percentage point from the first quarter and 0.3 points compared to the second quarter of 2013. The recent rate was the lowest for the statistic since the second quarter of 1995.

Homeownership peaked at 69.4 percent in the second quarter of 2004 and stayed within a range of 68.0 and 69.0 over the next 13 quarters before falling below 68.0 in the fourth quarter of 2007. While there have been quarterly ups and downs the homeownership rate has eroded at a fairly steady rate since then.

Homeownership was highest in the Midwest at 69.6 percent, 0.3 percentage points above the rate in the first quarter, also the highest in the nation, and up 0.2 points from one year earlier. The West had the lowest rate at 59.6 percent compared to 59.4 percent in the first quarter and 59.4 percent in the second quarter of 2013.

The rate in the Northeast was 62.1 percent, down 0.3 point quarter over quarter and 1.1 point from the same quarter the prior year. The South dropped from a 66.5 percent rate a year ago to 65.9 percent in the second quarter of this year. The rate in the first quarter was 66.5 percent.

As numerous studies have pointed out in the last year, young people today are not the homeowners their age group typically was even a few years ago. The homeownership rate for persons under the age of 35 was 35.9 percent in the second quarter, about half the rate of those 45 to 54 years of age and way below the 80.1 percent rate of Americans over the age of 65. As recently as 2008 and 2009 the homeownership rate for those under 35 was over 40 percent.

The Commerce Department estimates that there were 133.21 million housing units in the U.S. in the second quarter, an increase of 467,000 units from Q2 2013. Of the total 115.13 million units were occupied, 74.46 million by the owner and 40.67 million by a renter. In the previous quarter 114.67 million units of the total housing stock were occupied, 74.53 million by owners and 40.14 million by renters. Vacant units totaled 18.08 million units in the second quarter of 2014,

The national vacancy rate was 7.5 percent for rental housing and 1.9 percent for homeowner housing. Rental vacancies declined by 0.7 percentage points from the second quarter of 2013 and were 0.8 point lower than in the first quarter. Homeowner vacancies were essentially unchanged from a year earlier and 0.1 point below the rate the previous quarter. Rental vacancies were the lowest since at least the beginning of 2005 while homeowner vacancies had not dropped as low since the third quarter of 2005.

The rental vacancy rate was highest in the South (9.6 percent), followed by the Midwest (7.5 percent). The rates in the Northeast and West were each 5.8 percent. The homeowner vacancy rate was highest in the South (2.1 percent); the other three regions each had owner vacancy rates of 1.7 percent.

Approximately 86.4 percent of all U.S. housing units were occupied in the second quarter while 13.6 percent were vacant. Owner-occupied housing units made up 55.9 percent of total housing units, while renter-occupied units made up 30.5 percent of the inventory. Vacant year-round units comprised 10.2 percent of total housing units, while 3.4 percent were for seasonal use. Vacant units that were held off market comprised 5.8 percent of the total housing stock.

Where vacant units were available for rent the median asking price was $756. Vacant for sale units had a median listing price of $151,800.