Every quarter the US Census Bureau publishes results from its Housing Vacancies and Homeownership Survey (CPS/HVS). In the first quarter of 2019 the U.S. homeownership rate stood at 64.2 percent, unchanged from its level during the same time last year, but slightly down from the fourth quarter of 2018 (64.8 percent) (Figure 1).
A recent NAHB blog shows that although the homeownership rate remained unchanged, the number of newly-formed owner-occupied homes expanded in the first quarter. However, the first quarter expansion was at a slower pace than in 2018, indicating eroding housing affordability due to elevated home prices.
The “all minority” homeownership rate, which includes black, Hispanic, and Other households(Asian, Pacific-Islander, Native American, and other race households) stood at 47.1 percent in the first quarter of 2019, down from 48.0 percent in the first quarter of 2018 (Figure 1). It also slipped from its level in the fourth quarter of 2018 (47.7 percent).
Breaking down the ‘all minority’ homeownership shows that all groups lost ground in the first quarter compared to the same period last year (Figure 2). The black non-Hispanic rate fell by the most, dropping 1.3 percentage points to 41.8 percent. The Hispanic homeownership rate fell by 1.0 percentage point to 47.4 percent, while the Other non-Hispanic homeownership rate fell 0.7 percentage points to 56.3 percent. In contrast, the white non-Hispanic household rate gained 0.7 percentage points in the year ending in the first quarter to reach 73.2 percent.
Home prices have appreciated significantly in recent years while incomes gains have grown at a slower pace, which has exacerbated housing affordability. This challenge is particularly true for minority households – from 2016 and 2018 all minority groups had slower income growth rates than white non-Hispanic households. Eroding affordability, along with the fact that larger shares of the youngest generations are comprised of minorities, puts downward pressure on the overall homeownership rate.