The seasonally adjusted home ownership rate was 64.8% in the second quarter. That’s the lowest level since the second quarter of 1995, according to the Commerce Department. And economists say home ownership could fall even further as wage growth stagnates and banks keep lending credit tight, Reuters reported.
“We are becoming more of a rental society,” HIS Global Insight economist Patrick Newport told Reuters. “It’s becoming harder to own a home. People who lost their homes to foreclosure are now renting, and credit standards have tightened significantly.”
Rental vacancies fell to 7.5% in the second quarter, Reuters reported. That’s the lowest level in 19 years.
New household formation is also relatively stagnant, Newport told Reuters.
“We are not seeing much growth in household formation, which means that young people graduating from college are moving in with their parents,” he said. “That trend has not changed much and is the key reason why the housing recovery has been so weak.”
Home ownership hit a 19-year low in the second quarter, according to Commerce Department data.