According to the latest report from the US Census Bureau,
more Americans chose purchasing a home over signing a lease to rent in
the first quarter of 2017. This marks the first time since 2006 that the
number of new homeowner households outpaced the number of new renter
Of the 1.22 million new households that were formed in
the first quarter, 854,000 were new-owner households making the jump
straight to homeownership rather than renting first.
That means that the homeownership rate amongst new households was 70%!
is huge news as the national homeownership rate is currently 63.6% and
has only ever come close to this figure in the second quarter of 2004
when the homeownership rate reached an all-time high of 69.2%.
A recent Wall Street Journalarticle pointed to the uptick in first-time homebuyers coming to market as a reason for the jump:
return of first-time buyers is accelerating. In all they have accounted
for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest
point during the recent housing cycle in 2011, according to Fannie Mae,
which defines first-time buyers as anyone who hasn’t owned a home in the
past three years.”
Ralph McLaughlin, Trulia’s Chief Economist, had this to say about what a bump in new homeowner households could mean for the housing market:
renter household formation is one of the reasons why the homeownership
rate has continued to drop since the onset of the housing crisis, so any
sign this trend is reversing is something to take note of. We look
forward to future releases of these data to determine whether this is a
statistical blip or a trend.”
more and more potential first-time buyers realize their ability to buy a
home without having to rent first, not only will the homeownership rate
benefit, but so will the overall economy.