According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate was 63.6% in the first quarter 2017, which is statistically no different from its last quarter reading of 63.7%. The rate of homeownership appears to be stabilizing after reaching a cycle low of 62.9% in the second quarter of 2016.
Compared to the peak at the end of 2004, the homeownership rate has steadily decreased by 5.6 percentage points and remains below the 27-year average rate of 66.1%.
Homeownership increased among all age groups under 55 years old since a year ago. The millennial and Generation X homeownership rates both increased slightly by 0.1%, meanwhile, households aged 45- 54 years old rose by 0.2%. This suggests that people are gradually returning to the housing market.
The nonseasonally adjusted homeowner vacancy rate remained low at 1.7% in the first quarter 2017, down by 0.1% from last quarter 2016. 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 118.8 million for the first quarter 2017. This is 1.2 million higher than a year ago. Growth in household formations will spur rental housing demand first, and ultimately, home sales.