According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate was 64.2% in the first quarter 2018, which is statistically no different from its last quarter reading. The rate of homeownership appears to be on a sustainable upward trend after reaching a cycle low of 62.9% in the second quarter of 2016.
Compared to the peak of 69.2% in 2004, the homeownership rate is still down 5%, and remains below the 25-year average rate of 66.3%.
On an annual basis, homeownership increased among all age groups under 55. The share of millennial who own a home increased from 34.3% a year ago to 35.3% in the first quarter 2018. However, it slipped 0.7% from a three-year high of 36% in the last quarter 2017.The homeownership rates of households ages 35-44 experienced a 0.8% increase, followed by the 0.6% gains registered by households ages 45-54.
The nonseasonally adjusted homeowner vacancy rate remained low at 1.5% in the first quarter 2018, down by 0.1% from last quarter 2017. At the same time, the national rental vacancy rate held at 7%.
The HVS also provides a timely measure of household formations – the key driver of housing demand. Although it is not perfectly consistent with other Census Bureau surveys (Current Population Survey’s March ASEC, American Community Survey, and Decennial Census), the HVS remains a useful source of relatively real-time data.
The housing stock-based HVS revealed that the number of households increased to 119.5 million in the first quarter of 2018, 1.1 million higher than a year ago. The gains are largely due to strong owner household formation. Indeed, the number of homeowner households has been rising since the third quarter 2015, while the number of renter households has been on the downward trend. In the first quarter 2018, the number of renter households declined by 0.3 million from the last quarter 2017, the fourth consecutive decrease since the second quarter 2017.
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