Trends to Watch – Home Ownership Rates
Did you feel like last winter was the best time to buy a home? Did you follow that thought and buy the house?
Or were you one of those people who only thought about it and didn’t follow through?
Did you know? The country with the highest percentage of homeowners is China, at 90% the lowest homeownership rate is held by the county of Switzerland at 43.4%
If you nodded along to the first question, then you were a part of the 64.2% of the people of the United States who own a home.
2017, saw the most historic rise in the rate of homeownership in the previous 13 years. Though the increase only went from 63.7% to 64.2% in the last three quarters of the year, July 2016 to December of 2017, this has been a tremendous rise.
The last time a rise like this was seen, was in the year of 2004 where the homeownership rate had been 69.2%
The US saw an increase in the number of homeowners by 1.3 million!
So, all those who believed the pitch by their real estate expert as to why the last quarter of 2017 was the best time to buy houses in the United States, you can now say that you were one in 1.3 million.
But this rise in the number of homeowners has also brought down the number of home renters by 286,000.
New owners, if you bought that new house with the intention of renting it out, you are out of luck! Those tenants you counted on, to redeem your investment, have now brought their own houses! This is the largest inclusion of renters in the market for the last three year.
The Chief Economist and Founder of Veritas Ubris Economics, advises these landlords to maintain caution when it comes to the near future as there will be downward pressure on renters.
What has 2018 brought in? There is no significant change in the percentage of homeowners with the numbers maintaining at a steady 64.2% in the first quarter of the year. We are to wait and watch what the remainder of 2018 will bring us.
When we take a look at the split up of who owns the houses across the United States, we see that the majority share of 79.2% is held by the people of ages 65 and above. That rate of homeownership has just risen from 35.6% to 36%. The most significant increase in the rate of homeownership is in the generation of 40 – 60 years of age with the current rate being 75.3%
There has also been a huge change in demographics. The millennial generation is now entering their thirties, have begun to get married and are giving a thought of settling down in their own homes. This has resulted in their first real estate purchase.
While this increase in homeownership is a great news for owners, renters, and the country it, ironically, makes it extremely difficult for the prospective homeowners who can now only dream of finding their dream homes. The house vacancy rates have drastically gone down.
Another downside to this is that the rates of new home construction will rise as their demand increases and supply is low.
Let’s see how this change affects the forthcoming years’ rate of home ownership.
Will it rise further? Will it fall?
We can only wait and see.