Real Estate Rise from 50
The U.S. home ownership rate rebounded slightly in the third quarter, after having plummeted to a 50-year low in the previous quarter. The Census Bureau reported this week that the home ownership rate rose to 63.5 percent last quarter.
Household formation is increasing, despite the rate still being lower than a year ago and far off from its 69.2 percent peak during the housing boom. In the third quarter, more than 1.1 million households were added.
Household formation is the number of newly occupied housing units, which includes both rented and owned. Most of the recent uptick in household formation has been attributed to the renter side. Just under half of the new households formed in the third quarter were from home owners.
“Though the majority of household formation is still renters, the owner-occupied share was at its highest level in a decade,” says Jed Kolko, chief economist at Indeed, an online job site. “Both the improving economy and the aging of millennials will give home ownership a boost.”
As millennials age into their 30s, they’re starting to form new households. They often opt to first rent before settling down and purchasing a home, say housing analysts. A survey conducted by Trulia this year shows 80 percent of millennials say they want to own a home, which is the highest share of any other generation.