Home Ownership Rate Creeps Upward

Dated: 08/01/2017

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HOME OWNERSHIP RATE TICKS UP
THE ECONOMY: AUGUST 1, 2017

The homeownership rate crept up close to a full percentage point from one year ago to 63.7 percent in the second quarter, encouraged by more owner household formation, according to the U.S. Census Bureau’s recent Quarterly Housing Vacancies and Homeownership report. The owner household formation rate overtook the renter household formation rate in the first quarter, and remained ahead in the second quarter—evidence that the shift toward owner-occupied is more than a one-off trend. Roughly 87 percent of housing was occupied in the second quarter, with 55.5 percent owner-occupied and 31.6 percent renter-occupied.

“For only the second time in 11 years, and for the second consecutive quarter, the number of owner-occupied households grew faster than renter households over the year,” wrote Ralph McLaughlin, chief economist at Trulia, in a Trulia Trends blog. “The fact that we now have two consecutive quarters where owner households outpaced renters is a strong sign this trend is reversing and that the homeownership rate bottomed out last year.”
The homeownership rate was only marginally higher in the second quarter compared to the first quarter, when it was 63.6 percent, the report found. The rate in the second quarter was again highest in the Midwest, at 68 percent, and the South, at 65.5 percent, though both regions have seen minimal movement year-over-year. Rates have gone up year-over-year in the Northeast and West, at 60.4 percent and 58.9 percent in the second quarter, respectively.
Households headed by those aged 65 and older comprised the biggest share of homeowners in the second quarter, 78.2 percent, while households headed by those aged 34 years and younger comprised the smallest, 35.3 percent.  Non-Hispanic White Alone homeowners, as defined by the Census, claimed the highest homeownership rate in the second quarter, as well: 72.2 percent. Asian, Native Hawaiian and Pacific Islander Alone homeowners encompassed the second-highest rate, at 56.5 percent, while Hispanic homeowners held the next-highest, at 45.5 percent. Black Alone homeowners totaled the lowest rate, at 42.3 percent.
The homeowner vacancy rate was 1.5 percent in the second quarter, the report revealed; the renter vacancy rate was 7.3 percent. Homeowner vacancy rates were highest outside metropolitan statistical areas (MSAs) at 2.1 percent, ahead of in suburbs at 1.5 percent and in principal cities at 1.4 percent. Renter vacancy rates were also highest outside MSAs at 8.8 percent, followed by inside principal cities at 7.2 percent and in suburbs at 7.1 percent.
The median asking sales price for vacant for sale housing in the second quarter was $177,200, the report showed. The median asking rent for vacant for rent housing, over the same period, was $910.
Source: U.S. Census Bureau


CONSUMER CONFIDENCE MAKES STRONG SHOWING

Consumer confidence made a strong showing in July, posting a 121.1 reading in the latest Consumer Confidence Index® from The Conference Board. The Expectations reading of the Index rose to 99.6, while the Present Situation reading rose to 147.8. June’s reading was 117.3.
“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, director of Economic Indicators at The Conference Board, in a statement. “Consumers’ assessment of current conditions remained at a 16-year high and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.”
The percentage of consumers who believe business conditions are “good,”
 as defined by the Index, increased from 30.6 percent in June to 33.3 percent in July; the percentage of those who believe business conditions are “bad” stayed the same from June at 13.5 percent. The percentage of those who expect business conditions to improve increased from 20.1 percent in June to 22.9 percent in July; the percentage of those who expect business conditions to worsen decreased from 10.0 percent in June to 8.2 percent in July.
The percentage of consumers who believe jobs are “plentiful,” in addition, increased from 32.0 percent
 in June to 34.1 percent in July, according to the Index; the percentage of those who believe jobs are “hard to get” decreased from 18.4 percent in June to 18.0 percent in July. The percentage of those who expect more jobs in the coming months stayed the same from June at 19.2 percent; the percentage of those who expect less jobs in the coming months decreased from 14.6 percent in June to 13.3 percent in July.
The percentage of consumers who expect higher incomes decreased from 20.9 percent in June to 20.0 percent in July; the percentage of those who expect a decrease increased from 9.3 percent in June to 10.0 percent in July.
Source: The Conference Board

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David Sarnowski

David is a seasoned real estate professional, specializing in residential sales, rentals and investment properties. David is a 15 year resident of the New Jersey Gold Coast, with the local knowledge n....

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