Home-Ownership Remains Near Its Interim Low

Over the last decade the general trend has been consistent: The rate of home ownership continues to decline. The Census Bureau has now released its latest quarterly report with data through Q3. The seasonally adjusted rate for Q3 is 63.5 percent, unchanged from Q2. The nonseasonally adjusted Q3 number is 63.7 percent, the same as Q1 but up from the 63.4 percent interim low in Q2. The Census Bureau has been tracking the nonseasonally adjusted data since 1965. Their seasonally adjusted version only goes back to 1980. Here is a snapshot of the nonseasonally adjusted series with a 4-quarter moving average to highlight the trend.

The consensus view is that trend away from home ownership is a result of rising residential real estate prices in general and limited supply of entry level priced homes that would attract first-time buyers.

Homeownership Rates in Other Countries

The snapshot below gives us a crude comparison of the US homeownership rate compared to seventeen other countries. Our data source is a subset of the nearly four dozen countries in this Wikipedia entry on home ownership. We included the outliers at the top and bottom, Romania at 95.6% and Switzerland at 44.0%, both as of 2013.

The underlying factors in the chart above are quite complex: Residential real estate affordability, financing options, household income distributions, demographics and cultural values, to mention some of the more obvious.

In a future commentary, we’ll look at some of the underlying factors behind the trend in the US.

For additional perspectives on residential real estate, here is the complete list of our monthly updates: