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Homeownership Hits 20-year Low in 4Q 2014

The homeownership rate in America hit a 20-year low, dropping to 64% in the fourth quarter of 2014.

This was 1.2 percentage points (+/-0.4) lower than the fourth quarter 2013 rate (65.2%) and 0.4 percentage points (+/-0.4) lower than the rate last quarter (64.4%).

The rental vacancy rate of 7% was 1.2 percentage points (+/-0.4) lower than the rate in the fourth quarter 2013 and 0.4 percentage points (+/-0.3) lower than the rate last quarter.

Paul Diggle, property economist for Capital Economics said that the decade-long decline in the share of the population who own their home may now be drawing to an end.

“The usual health warnings apply regarding the reliability of the Census Bureau’s notoriously noisy homeownership and vacancy rate survey. The figures show that the homeownership rate in the US slipped from 64.4% in Q3 to 64.0% in Q4,” Diggle says in a client note. “That’s a 20-year low, and in line with the forecast that we first made in 2012.

“Yet the long decline in the homeownership rate may finally be drawing to a close,” he says. “After all, mortgage delinquency and foreclosure rates have fallen back to long-run norms, mortgage credit conditions are showing signs of loosening and wage growth may soon accelerate, helping young households to make the leap into homeownership. The survey evidence certainly suggests that owning a home remains part of most people’s perception of the American dream.”

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