Great insights from Paul Briggs, CRE. Homeownership is holding up well despite affordability challenges. You can see more from Roofstock Research here: https://lnkd.in/gtpfHdbK and sign-up to receive future research in your inbox here: https://lnkd.in/e4YArAz3 #Roofstock #Research #Homeownership
Given the legitimate concerns around housing supply and affordability in the U.S. and the variety of editorializations around institutional investors buying up homes, U.S. Census Bureau data provide a good reality check on homeownership. The Current Population Survey/Housing Vacancy Survey (CPS/HVS) gives us a quarterly look at homeownership based on a sample of 72,000 addresses across the country. Here are some key takeaways: • The homeownership rate was 65.6% in 24Q1 vs. 66.0% in 23Q1, according to the CPS/HVS. • This change was not statistically significant per the U.S. Census Bureau (i.e., within the survey’s margin of error). • Over the past five years the homeownership rate has averaged 65.7%. • Homeownership was lower, averaging less than 65.0%, in the 1970s, 1980s, 1990s, and 2010s. • Homeownership was higher during the 2000s, with the housing boom pushing the average above 68.0%. • The survey shows a nearly 550,000 increase in owner-occupied housing units over the past year and a 7.5 million increase over the past five years. • Owner-occupied housing units grew at 5.7x the 1.3 million increase in renter-occupied housing units over the past five years, per the CPS/HVS. While we should not discount the affordability and availability challenges facing prospective homeowners, homeownership and resilient home price data show that we do not have an ownership crisis in the U.S. Further, the data are also a reminder that roughly one-third of households rent their primary residence (and about a third of those rent detached or attached single-family homes). Ownership could be a long-term goal for many of these households, but affordability and stage of life may not make that practical today. Many households begin as renters and eventually become owners. Also, people rent for a myriad of reasons and price to purchase isn’t the only deciding factor. A desire or need for geographic mobility and financial flexibility are two notable contributors to households choosing to rent instead of own. Some people simply prefer the renter lifestyle. State and federal housing policies should not ignore the equally valid desires of renter households to have access to high quality, affordable options to rent the type of home they want in a neighborhood they would like to live in. Homeownership is traditionally included as an aspect of achieving the American Dream, but it may not be the right or desired choice for every household. For perspective here, I’ve also attached homeownership rates in some other developed nations. Homeownership is less common in a number of developed economies across the world than it is in the U.S. The homeownership rate in France is ~5 percentage points lower than it is in the U.S. The difference is even more extreme in Germany where the homeownership rate is less than 41.0%. The data show that homeownership is holding up well in the U.S. What are your observations?