The U.S. Census Bureau released data Thursday showing that home ownership in America is now at its lowest rate since the federal government first started tracking the measure in 1965.
Steadily declining since an all-time high of 69.2 percent in the fourth quarter of 2004, the percentage of U.S. adults who now own a home stands at 62.9 percent.
A cacophony of economic trends have contributed to the recent degeneration, as ownership among 18 to 34 year-olds has also declined to an all-time low of 34.1 percent.
A combination of tighter mortgage loan qualifying requirements — a result of 2008 financial crisis — and wage growth that has lagged the increase in home prices by nearly 100 percent since June 2015, may serve as the best economic explanation for the decline.
However, an increase in renting, either by necessity or choice, may also be seen as a demographic and social trend which has also contributed to the drop off, especially for millennials.
“The falling home ownership rate is a sign that renting isn’t for just starting out . . . but is becoming an increasingly viable longer-term option for many households,” said Svenja Gudell, chief economist at Zillow. “It also means incomes are not yet rising quickly enough to broadly support new home ownership, and that inventory remains too tight to allow for meaningful access to affordable housing.”
With America’s population becoming increasingly urban, buying a home is impossible for many young people as the availability of affordable housing has also decreased. Since the second quarter of 2015, 1 million new households have been created, all of which are renting.
One glimmer of hope for the housing market is existing homes sales which are at a nine-year high, due in-part to historically low mortgage rates — the result of a relatively weak economy.
As of June, the median sales prices of a home in the U.S. was $247,700, up 4.8 percent since June 2015.
[NBC News] [ABC News] [Photo courtesy realtybiznews.com]