The homeownership rate was 64.2% during the quarter, up from the 63.7% rate in the fourth quarter of 2016 and an increase from the 63.9% rate in the third quarter of 2017, according to statistics released by the US Census Bureau.
“After bouncing around near 50-year lows for the past few years, the national homeownership rate finally seems to be gaining sustainable, meaningful upward momentum,” Zillow Senior Economist Aaron Terrazas said. “The fourth quarter of 2017 was unseasonably strong, driven by buyers determined to make a deal in a highly competitive market.”
Census data also that the national vacancy rate for homeowner housing fell to 1.6% during the fourth quarter, a drop of 0.2 percentage points compared to the year-ago period. The rate was virtually unchanged from the 1.6% vacancy rate in the third quarter of 2017. The rental housing vacancy rate was also steady year over year at 6.9%. However, the rate is 0.6 percentage points lower than the 7.5% vacancy rate in the third quarter of 2017.
Terrazas said he expects homeownership to continue growing in the coming quarters, although gains may be slow. He attributed his view to changes to the tax code, which could drive potential buyers to finally save for a down payment, and the stabilization of what had been rapid growth in rents and renter households.
“With rental supply now at least somewhat more balanced to renter demand, developers are likely to shift their focus back to the broader for-sale market, which is starving for new supply,” Terrazas said. “Assuming newly built homes are located in relatively accessible areas and are priced at a reasonable level, builders should have little trouble finding buyers for them.”
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The rate of homeownership rose in the fourth quarter, signaling upward momentum after staying near 50-year lows in recent years.