The homeownership rate for those under the age of 35 dropped to 37% in the third quarter of 2024, reaching the lowest level since the third quarter of 2019, according to the Census’s Housing Vacancy Survey (HVS). Amidst elevated mortgage interest rates and tight housing supply, housing affordability is at a multidecade low. The youngest age group, who are particularly sensitive to mortgage rates, home prices, and the inventory of entry-level homes, saw the largest decline among all age categories.
The U.S. homeownership rate held steady at 65.6% in the third quarter of 2024, showing a flat trend over the last three quarters. However, this marks the lowest rate in the last two years. The homeownership rate remains below the 25-year average rate of 66.4%.
The national rental vacancy rate went up to 6.9% for the third quarter of 2024, and the homeowner vacancy rate inched up to 1%. The homeowner vacancy rate remains close to the survey’s 67-year low of 0.7%.
Homeownership rates declined across all age groups compared to a year ago, except for those aged 55-64. Householders under 35 experienced the largest drop, declining by 1.3 percentage points from 38.3% to 37%. The 45-54 age group also saw a 1.3 percentage point decrease, decreasing from 71% to 69.7%. For householders aged 35-44, who experienced a modest 0.6 percentage point decline. Among those 65 years and over, homeownership inched down slightly from 79.2% to 79.1%. In contrast, the homeownership rate of the 55–64 age group rose to 75.9% from 75.4%.
The housing stock-based HVS revealed that the count of total households increased to 132.1 million in the third quarter of 2024 from 130.3 million a year ago. The gains are largely due to gains in both renter household formation (1.1 million increase), and owner-occupied households (655,000 increase).
One Response
The phrase “housing affordability is at a multidecade low” really caught my attention, as I’ve been feeling the pinch of tight housing supply and elevated mortgage interest rates in my own travels. As someone who’s always on the lookout for coastal getaways with a bit of sunshine, I’ve noticed that areas with lower costs of living tend to have more affordable entry-level homes. For instance, I recently visited a small town by the sea where the average home price was around 200,000, which seems relatively reasonable compared to other places I’ve been. I wonder, will this trend of declining homeownership among younger households continue, or will we see a shift towards more affordable options in the coming years?