The homeownership rate for Generation X was 58.9% in the first quarter of 2016, up by 0.5% on a year-over-year basis, while homeownership rates continued to decline for other age groups.
According to the Census Bureau’s Housing Vacancy Survey (HVS), the nation’s homeownership rate in the first quarter of 2016 was 63.5%, down by 20 basis points on a nonseasonally adjusted basis over the first quarter of 2015. Compared to the peak at the end of 2004, the homeownership rate has steadily decreased by 5.7 percentage points and remains below the 25-year average rate of 66.2%.
The homeownership rate for Generation X was 58.9% in the first quarter of 2016, up by 0.5% on a year-over-year basis, while homeownership rates continued to decline for other age groups. The homeownership rate for household heads older than 65 years old (78.8%) decreased by 20 basis points from the first quarter of 2015. The largest decline, however, was for those aged 45-54 years old, with an annual drop of 90 basis points.
Both the national homeowner vacancy rate and rental vacancy rate declined in the first quarter of 2016. The nonseasonally adjusted homeowner vacancy rate remained low at 1.7% in the first quarter 2016, 20 basis points lower than the rate in the first quarter 2015.The national rental vacancy rate of 7% was down by 10 basis points, compared to the same period a year ago.
The HVS also provides a timely measure on 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 stood at 117.5 million in the first quarter of 2016. This is over half million higher than a year ago and sustains gains recorded at the end of 2014. On a less volatile one-year moving average, the increasing trend of household formations is clearly shown in the graph below. On a one-year moving basis, the pace of household increase is maintained at around 0.9% in the first quarter of 2016. Growth in household formations will spur rental housing demand first, and ultimately, home sales.