America’s homeownership rate fell to 64.1% in the second quarter of the year, sliding from the first quarter’s 64.2% rate.
While the nation’s senior population still had the highest rate – 78% for Americans 65 and older, falling from 78.5% – an analysis from Zillow indicates the younger generation is warming up to homeownership. The rate for Americans under 35 years old rose to 36.4% from 35.4% in the prior quarter, the largest increase of any age bracket, according to Census data.
“Homeownership rates repeated the declines of the previous quarter, albeit less dramatically,” Zillow said. “The declines we’ve seen in recent quarters are erasing gains we started to see in 2016. The continued decline was more dramatic in older age brackets. In a surprising turn, while their older peers have apparently been pulling back, the homeownership rate in the under-35 age bracket increased.”
Homeownership for 35- to 44-year-olds dropped to 59.4% from 60.3% in the prior quarter, according to Census data.
“By 2019, some buyers simply couldn’t save enough for a down payment and pulled back from the market, causing sales and home value appreciation to slow dramatically,” Zillow said. “Given the affordability challenge of saving for that down payment, this could be a testament to the ambition of younger households to break into homeownership.”
Zillow may be right as several reports also indicate that America’s young adults are increasingly entering the housing market.
Earlier this year, Realtor.com published a report that revealed that Millennials surpassed Generation X as the group responsible for the most new mortgages in 2018.
Since then, the Millennials’ share of the mortgage market has continued to rise, according to the report. By the end of 2018, Millennials represented 45% of all new mortgages, compared to 36% for Generation X, and 17% for Baby Boomers.
“In November 2018, Millennials finally overtook Generation X as having the largest share of new loans by dollar volume, with a share of 42% in December, compared to a share of 40% for Generation X and 17% for Baby Boomers,” Realtor.com writes. “This indicates Millennials are willing to take on larger mortgages than any other generation to fulfill their dreams of homeownership.”
Published at Fri, 26 Jul 2019 17:19:00 +0000