In the middle of an economic downturn and the worst public health crisis in a century, the U.S. homeownership rate surged to its greatest point since the Great Economic crisis.
The homeownership rate reached 67.9% in the 2nd quarter of 2020, according to a recent report from the U.S. Census Bureau. That’s up from 65.3% of Americans owning their houses in the first quarter of the year and 64.1% in the 2nd quarter of 2015.
While on the surface area the housing market appears to have recovered from the housing crash of more than a year back, the rate is a bit deceiving. The Census’ information collection efforts were affected by the unique coronavirus and taking place shutdowns.
“Part of the increase we’re seeing is likely due to modifications in the way the U.S. Census Bureau gathered data,” states realtor.com Chief EconomistDanielle Hale. “The housing market is doing truly well. It’s likely the homeownership rose, but I do not think it’s most likely that it increased that much.”
After a time out throughout stay-at-home orders, the real estate market has rebounded– and then some. The absence of homes on the marketplace hasn’t prevented the crowds of purchasers from coming down en masse, seeking to leave small, city apartments and cramped starter houses while taking benefit of record-low home mortgage interest rates. (Rates dipped just listed below 3% for the very first time ever earlier this month.)
“People still desire to own houses, and with home mortgage rates low, a lot of individuals are benefiting from that even though there are lots of frightening things going on in the economy,” says Hale.
This has led median home rates to soar 9.1% year over year in the week ending July 18. That’s in spite of a recession and the most widespread unemployment since the Great Depression. On the other hand, the number of homes for sale is down 33% compared with the previous year, when the nation was already experiencing real estate scarcity.
Homeownership also increased for any age and race. The Black homeownership rate jumped to 47%, up from 40.6% a year previously. Nevertheless, those rates are still lower than those of other groups: About 51.4% of Hispanics, 61.4% of Asians, and 76% of whites were homeowners.
“It’s not a brand-new phenomenon that homeownership rates for Black and Hispanic Americans have lagged behind,” says Hale. “We did see their homeownership rates enhance, however it’s not enough to close the space.”