The Q2 2020 U.S. homeownership rate was 67.9%, up from 64.1% in Q2 2019 and up from 65.3% in Q1 2020, according to the U.S. Census Bureau.
The homeownership rate among the age group 35 to 44 increased 4.9 percentage points during the second quarter to 64.3%. This age group experienced the highest gains in homeownership in the second quarter of the year.
All regions saw an uptick in homeownership rate. The South was the region with the highest gains in homeownership, where it climbed to 71.1%.
Both rental and homeowner vacancy rates dropped in spring showing how strong housing demand is during the pandemic.
The Census Bureau released the Residential Vacancies and Homeownership report for Q2 2020. According to the release, the homeownership rate increased to 67.9% by nearly 4 percentage points compared to a year earlier1. Low mortgage rates is one of the main reason that the homeownership rate was strong in the second quarter although the coronavirus outbreak.
In addition, the report looks deeper at trends among households with incomes below the national family median, which was nearly $77,000 in 2018. It is interesting to see that homeownership in this group also increased in the second quarter to 55.2% from 50.0% a year earlier. This is a very promising indicator for the real estate market. Compared to pre-recession levels, more low-income households became homeowners during the pandemic.
Homeownership Trends by Age
Homeownership rates rose in all age groups in the second quarter of 2020. Specifically, these gains continue to be concentrated among Millennial and Gen Xer households, though the share of seniors who own their home remains the highest of all age groups.
See the homeownership rate by age group:
Homeownership Trends by Race/Ethnicity
Black homeownership rates continue to increase, elevating their share of households living in owner-occupied units to 47%. Specifically, Black households experienced the highest gains in homeownership rates among any other race. The homeownership rate increased by 6.4% from 40.6% in Q2 2019 to 47% in Q2 2020. In comparison, homeownership rates for White households increased 2.9% in Q2 2020 compared to a year earlier. However, the gap in homeownership rate between White and Black households remains nearly 30 percentage points.
See here the homeownership rates by race/ethnicity:
This was one of the most anticipated reports since it reflects the impact of COVID-19 on housing demand. However, there are some serious questions about the accuracy of this survey. It is likely the results in the second quarter are distorted by the pandemic. Specifically, in-person interviews were suspended for the duration of the second quarter and replaced with telephone interview attempts when contact information was available. As a result, the response rate was lower in this report than the average response rates for April, May, and June 2019. Thus, the current report might show the trend, but we should exercise caution when using the absolute numbers of homeownership rates.
1 This is the non-seasonally adjusted figure for the homeownership rate. Homeownership rate increases by 0.01% on average between the first and second quarters of the year.
If there is a home that you would like more information about, if you are considering selling a property, or if you have questions about the housing market in your neighborhood, please reach out. We’re here to help.
