Despite tight housing inventories and rising home prices, the homeownership rate rose slightly in the third quarter and reaching the highest level since 2014, the U.S. Census Bureau reported Tuesday.
The homeownership rate rose to 63.9 percent in the third quarter, up slightly from 63.5 percent a year ago, the Census Bureau reported.
While the uptick isn’t considered statistically significantly, economists were still somewhat upbeat that the homeownership rate has now moved up for a second consecutive quarter. Also, more Americans are showing a preference for owning: The number of owner households increased by 755,000 from a year ago, while the number of renter households fell 348,000, according to the Census Bureau report.
Still, finding a home remains a challenge for many Americans. The inventory levels for both new and existing single-family homes is about 20 percent below the long-term average.
The homeownership rate sank to a 50-year low in the second quarter of 2016. It still remains below its historic norm of around 65 percent. In the years leading up to the housing bubble, the homeownership rate set a high of more than 69 percent.
The homeownership rate is showing the largest rebound in the Midwest, where the ownership rate climbed to 69.1 percent from 68 percent in the second quarter. The Midwest is also considered a place where home prices remain relatively affordable compared with other regions of the U.S., The Wall Street Journal reports. The homeownership rate mostly remained flat in other parts of the country that have seen home prices rise more quickly.
“The American dream of homeownership remains elusive, as the third-quarter figure shows little change in the overall rate,” says Lawrence Yun, chief economist at the National Association of REALTORS®. “The reason is simple. There is just not enough supply of homes to fully satisfy the desire to own. The lack of inventory has pushed up home prices by 48 percent from the low point in 2011, while wage growth over the same period has been only 15 percent.”