Home Ownership Rate: 65.9% in Q2 2023
Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The Census Bureau released its latest quarterly report for Q2 2023 showing the latest homeownership rate is at 66.0%, unchanged from Q1 2023. The non-seasonally adjusted Q2 number is at 65.9%, down 0.1% from the Q1 2023 number. Over the last decade, the general trend has been consistent: The rate of homeownership has struggled. The recent recession as a result of the COVID global pandemic caused a massive, but brief, jump in homeownership due to grossly reduced spending.
Here's an excerpt from the press release:
National vacancy rates in the second quarter 2023 were 6.3 percent for rental housing and 0.7 percent for homeowner housing. The rental vacancy rate was higher than the rate in the second quarter 2022 (5.6 percent) and not statistically different than the rate in the first quarter 2023 (6.4 percent).
The homeowner vacancy rate of 0.7 percent was lower than the rate in the second quarter 2022 (0.8 percent) and not statistically different than the rate in the first quarter 2023 (0.8 percent).
The homeownership rate of 65.9 percent was not statistically different from the rate in the second quarter 2022 (65.8 percent) and not statistically different from the rate in the first quarter 2023 (66.0 percent).
The Census Bureau has been tracking the non-seasonally adjusted data since 1965. Its seasonally adjusted version only goes back to 1980. Here is a snapshot of the non-seasonally adjusted series with a 4-quarter moving average to highlight the trend. The latest 4-quarter moving average is at 66.0%, its highest level since Q2 2021.
The consensus view is that trend away from homeownership is a result of rising residential real estate prices in general and limited supply of entry-level priced homes that would attract first-time buyers.
Here is the YoY version of the chart going back to 1965.
For an interesting comparison to prices, here is an inflation-adjusted look at the S&P Case-Shiller Home Price Index.
Homeownership Rates Across the Globe
The snapshot below gives us a crude comparison of the US homeownership rate compared to some select other countries. Our data source is a subset of the over 70 countries in this Wikipedia entry on homeownership. We included the more populous outliers at the top and bottom, Vietnam at 90% (2020) and Switzerland at 41.6% (2019).
The underlying factors in the chart above are quite complex: Residential real estate affordability, financing options, household income distributions, demographics, and cultural values, to mention some of the more obvious.
ETFs associated with residential real-estate include: iShares Residential and Multisector Real Estate ETF (REZ).
This article was originally written by Jill Mislinski. Starting in January 2023, AP Charts pages will be maintained by Jennifer Nash at VettaFi | Advisor Perspectives
For additional perspectives on residential real estate, here is the complete list of our monthly updates:
- S&P/Case-Shiller Home Price Index
- FHFA House Price Index
- NAHB Housing Market Index
- New Home Sales
- Existing Home Sales
- New Residential Housing Starts
- New Residential Building Permits
- Secular Trends in Permits and Starts