Why All The Chicken Littles Should Calm Down
The U.S. Census Bureau recently
released their 2019
Q2 Homeownership Report. Some began to see the sky falling,
believing the report showed Americans may be stepping back from their belief in
homeownership.
The national homeownership rate (Americans who owned vs.
rented their primary residence) increased significantly during the housing
boom, reaching its peak of 69.2% in 2004. The Census Bureau reported that
the second quarter of 2019 ended with a homeownership rate of 64.1%, which is
down from the 64.8% rate for the fourth quarter of 2018. Based on this news,
some started to question the consumer’s belief in the idea of homeownership as
a major part of the American Dream.
Everyone
Calm Down…It is true the homeownership rate
did fall. However, if you look at the national rate over the last 35 years
(1984-2019), you can see that the current homeownership rate has returned to
historical norms. The 64.1% rate is equivalent to the rates in 1984 and 1994.
What
Will the Future Bring? Part of
the reason the homeownership rate slipped is a lack of inventory available for
purchase for first-time home buyers. The demand is there, but currently, the
supply is not. It seems, however, that is about to change.
In a recent report, Ivy Zelman explained that builders have
finally started to increase the number of homes they’re constructing at the
lower-end price points:
“Robust growth in the entry-level
price point of late should translate to a reacceleration in homeownership rates
moving forward.”
Bottom Line
Today, the homeownership rate sits at historic norms. In all
probability, it will increase as more inventory becomes available. There is no
reason for concern.
#homeownership
#housingmarket
#dreamhome
#timetobuy
#realestate
#realestatemarket
#camarillo
#camarillorealestate
