First quarter data from the Census Bureau indicate that the nation’s homeownership rate fell to 63.7% for the first quarter of 2015.
Data from the Current Population Survey / Housing Vacancy Survey reveal that the homeownership rate declined by 1.1 percentage points on a nonseasonally adjusted basis from the first quarter of 2014 to the first quarter of 2015. From a peak of 69.2% set at the end of 2004, the rate has declined 5.5 percentage points to 63.7%. The average homeownership rate during the 1990s was 64.9%.
All age groups experienced year-over-year declines in homeownership rates for the first quarter.
However, some age classes have experienced greater declines in homeownership than others. For example, over the last year the homeownership rate for households headed by an individual younger than 35 declined by 1.6 percentage points. While the decline for those aged 35 to 44 was larger (and larger among all age cohorts with a drop of 2.3 percentage points), the percentage decline (4.4% decline from the level of the first quarter of 2014) was largest for this younger than 35 class.
Vacancy rates continue to fall for both rental and owned residences according to the Census data. For the start of 2015, the seasonally adjusted homeownership rate 1.86%. The vacancy rate for owned homes peaked at 2.89% in 2008 and has been falling since the end of the Great Recession.
For the start of 2015, the rental vacancy rate stood at 6.93%. This is substantially lower than the peak rate of 10.9% set during the third quarter of 2013.
The Census CPS/HVS is also a source of data regarding overall household formations, albeit an imperfect one that is not entirely consistent with other sources including the Decennial Census and the American Community Survey.
Some analysts adopted a very positive stance from last quarter’s estimates that showed the count of households jumping 1.34 million for the final quarter of 2014. It is still not clear what caused this jump, although the first quarter 2015 data reveal a loss of about 407,000 households, thus giving back part (but not most) of the fourth quarter gain.
On a more stable year-over-year basis, the annual gain in households stands at just under 1.5 million, which does mark good news for housing demand. Additional reporting this year will reveal more details.