It’s no secret that the Great Recession spurred a decline in homeownership rates, but it may be a bit of a surprise how far the level of homeownership has fallen:
The U.S. homeownership rate hit its lowest level since the mid-1990s, according to a Census release that showed that despite two years of recovery in the housing market there are still fewer homeowners than there were before the recession.
But the data also suggest that more young people are moving out of their parents’ home and into rentals—a positive first step toward an eventual recovery in the share of households that own their home.
Some 64.8% of American families—about 74.4 million households—owned the homes they lived in during the first quarter of this year, down from 65.2% at the end of 2013, according to the U.S. Census Bureau. That was the lowest level since 1995 and is a significant drop from 2006, when a peak of 76.5 million households, or 68.9%, were owner-occupied.
The underlying factors are pretty good news for the apartment industry, at least in the near future:
In March, employment among people ages 25 to 34 reached 75.9%, which was close to a five year-high and up from 75.4% a year ago…
One out of every five 25- to 34-year-olds without a job lives with their parents, versus about one in eight that is employed, according to an analysis of Census data by Mr. Kolko.
And, indeed, the improving job market for young people is one reason why there has been a boom in apartment construction and rents.