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Homeownership Rate Continues to Rise in 2020

July 29, 2020 By Tami Savage

Homeownership Rate Continues to Rise in 2020

So far, it’s been quite a ride this year, and our nation has truly seen its fair share of hurdles. From COVID-19 to record unemployment and then the resulting recession, just to name a few, the second quarter of 2020 has had more than a few challenges. Amidst the many roadblocks, however, the U.S. homeownership rate rose again, signaling great strength in the recovery of the housing market and an indication that even in a time of crisis, Americans still feel confident about buying a home.

Yesterday, the U.S. Census Bureau announced:

“The homeownership rate of 67.9 percent was 3.8 percentage points higher than the rate in the second quarter 2019 (64.1 percent) and 2.6 percentage points higher than the rate in the first quarter 2020 (65.3 percent).”

U.S. Homeownership rates showing over last 4 quarters: third quarter 2019 at 64.8%, fourth quarter 2019 at 65.1%, first quarter 2020 65.3%, and second quarter 2020 at 67.9%

The increase is also represented by race and ethnicity of the householder:

Homeownership rates by race and ethnicity of householder shows the U.S. as a whole 65.3% in first quarter 2020 vs 67.9% in second quarter.  Non-hispanic white was 73.7% in first quarter and 76% in second quarter.  Black shows 44% in first quarter vs 47% in second quarter.  Hispanic was 48.9% in first quarter and 51.4% in second quarter.  Asian, Native Hawaiian and Pacific Islander shows 59.1% in first quarter vs 61.4% in second quarter.  All Other races were 55.9% in first quarter and 59.3% in second quarter.

There are many reasons why the homeownership rate in this country is rising, and one of the key factors is historically-low mortgage rates. Rates hovering at all-time lows are helping to drive affordability and enabling more potential homeowners to enter the market today. According to Ralph McLaughlin, Chief Economist for Haus:

“Mortgage rates are the icing on the cake for households that were thinking about buying…They found an unexpected opportunity during the worst economic downturn America has seen since the Great Depression.”

In addition, many potential homebuyers have been using their time this year to search for homes that offer more space than their current rental apartments. Many of these homebuyers are younger and, as noted by Odeta Kushi, Deputy Chief Economist at First American, are the buyers driving the homeownership rate in an upward direction:

“Big jump in the homeownership rate today, mostly driven by younger households. We saw a spike in the number of owners, and a decline in the number of renters. This is the highest rate of homeownership since 2008.”

This growth is outstanding news for the housing market and for those who have recently found their new homes. If homeownership is on your shortlist this year, maybe now is a great time to meet with a real estate professional to evaluate your current situation. Perhaps historically low mortgage rates can help you to become a homeowner too.

Bottom Line

If you’re thinking of buying a home this year, let’s connect today to take your dream one step closer to reality.

Announcement from the census: As a result of the coronavirus pandemic (COVID-19), data collection operations for the CPS/HVS were affected during the second quarter of 2020. In-person interviews were suspended for the duration of the second quarter and replaced with telephone interview attempts when contact information was available. If the Field Representative was unable to get information on the sample unit, the unit was made a Type A no interview (no one home, refusal, etc.). See the FAQ for more information.

Tagged With: Demographics, First Time Home Buyers, For Buyers, Housing Market Updates, Interest Rates

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