After hitting a record low in the second quarter of 2016 homeownership rates inched back up in the third quarter. According to the Census Bureau’s Housing Vacancy Survey (HVS), the U.S. homeownership rate rose to 63.5% in the third quarter 2016.
The homeownership rate remains well below the 2004 peak and the 25-year average rate of 66.2%. Millennials could play a role in changing that. The millennial homeownership rate increased by 1.1% after reaching its own historically lowest level of 34.1% in the second quarter 2016, suggesting millennials are gradually returning to the housing market.
Comparing all age groups only the 35-44 and 65+ age group saw an increase compared to this time last year. The largest drop among all age groups was the 44-54 age group which dropped from 69.9% to 69.1%.
The HVS also provides a timely measure of household formations – the key driver of housing demand. The housing stock-based HVS revealed that the number of households increased to 118.6 million for the third quarter 2016. This is 1.2 million higher than a year ago and sustains gains recorded at the end of 2015.