Homeownership Rate Continues to Decline

The seasonally adjusted national homeownership rate fell to 64.8% during the second quarter of 2014. This marks a drop of 4.6 percentage points since the peak rate of 69.4% during the second quarter of 2004, according to the Census Bureau’s quarterly survey.

Homeowner Rate_2q14

The homeownership rate declined by 0.3 percentage points year-over-year. The current rate is also below the 20-year historical average of 66.9%.

The data continue to show declines in homeownership across all age groups, with the largest declines being experienced for younger households. For example, the homeownership rate for those under age 35 currently (second quarter of 2014) stands at 35.9%, which is 7.7 percentage points lower than the peak rate of 43.6% (second quarter of 2004). For those 35 to 44, the homeownership rate is currently 60.2%, 9.9 percentage points lower than the peak rate of 70.1% (first quarter of 2005).

The homeownership rate will continue to decline as pent-up housing demand is unlocked, as such new households are more likely to be renters than homeowners.

Vacancy Rates_2q14_v2

Vacancy rates for owned and rental housing continued along the declining trend that has been in place since 2010. The rental vacancy rate declined to 7.5% during the second quarter, the lowest rate since 1997. The homeowner vacancy rate fell to 1.9%, matching the lowest rate since 2005.

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6 replies

  1. 3 things; jobs, jobs, and more jobs.

  2. Seeing the lowest homeownership rate in twenty years is simply more evidence that the problem facing the entire industry is the disappearance of the first-time homebuyer. Imagine what sales would look like if the 30% of first-time buyers missing from the current market were to be enticed into entering the market. Why are so many potential first-time buyers not in the market. Is it stagnant income, not enough full-time jobs, student debt or is it something else? We will never know the real reasons until someone is smart enough to organize a survey of renters under the age of 40 to find out. Its a shame that NAHB, NAR and the MBA cannot get together and fund a survey instead of spending their time painting smiley faces on a market that is going south again. I would be happy to assist in such an effort pro bono.

    • 29 year old, first time home buyer here… I will be purchasing my first home in the next couple of months, so I thought I’d add my two cents here. I have been fortunate enough to have had the option to purchase a home for 5 or more years, many of my friends have not. But I haven’t until now, and here’s why: Uncertainty. Lots of uncertainty: Job market, pay scale, career moves, home prices, politics, and so on. Buying a first home is an enormous commitment. I will be going from a low risk, low debt, low time-commitment lifestyle, to just the opposite- Uncertainty, I believe, is what’s preventing my generation from purchasing their first home.


  1. Home ownership rate hits new lows » OC Housing News

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