Homeownership Hits Lowest Level Since June 1995

The homeownership rate in the first quarter of 2014 is at the lowest since June 1995.

The rate of homeownership at the end of 1Q2014 was 64.8%, which is 0.2 percentage points lower than the first quarter 2013 rate of 65%, according to the U.S. Census Bureau.

The rental vacancy rates inside principle cities, in the suburbs and outside MSA’s were not statistically different from the first quarter 2013 rates.

Anthony Sanders, distinguished professor of real estate finance at George Mason University, says on his blog Confounded Interest, that he knows exactly why.

“Here is the reason why: declining real median household income, declining wage earnings growth, declining mortgage purchase applications,” he says.

While new household are forming – about 1 million U.S. households were formed in 2013, four in five are renters and the percentage of them buying is shrinking.

The homeowner vacancy rate inside principal cities (2.3%) was higher than the rate in the suburbs (1.8%), but not statistically different from the rate outside MSA’s (2.3%).

The homeowner vacancy rate outside MSAs was higher than the rate in the suburbs. The homeowner vacancy rates inside principle cities, in the suburbs and outside MSA’s were not statistically different from the corresponding first quarter 2013 rates.

For the first quarter 2014, the homeowner vacancy rate was higher in the South (2.2%) than in the Northeast (1.8%) and the West (1.7%), but not statistically different from the rate in the Midwest (2%). The homeowner vacancy rates in the Northeast, Midwest, South and West were not statistically different from the first quarter 2013 rates.