By Robert Dietz | Builder
With housing leading the economy and a noticeable, renewed focus on the importance of “home” as the COVID-19 pandemic continues, it’s hard to remember that just a few years ago some analysts and pundits were quite bearish when it came to the future of homeownership. That line of thinking claimed that for years to come the homeownership rate would continue the decline that began in 2005.
During the housing boom of the early 2000s, the homeownership rate peaked at 69.2%. However, the subsequent foreclosure crisis during the Great Recession, combined with increasing housing affordability challenges, led to an 11-year decline for the rate. Homeownership bottomed out at a 62.9% share of households during the second quarter of 2016.
Since that time, and contrary to many forecasts, homeownership staged a key rally, rising to 65.3% just prior to the COVID-19 recession. These gains were driven by younger households. The first quarter of 2020 saw some of the strongest gains for homeownership since the Great Recession. The timing of this pivot is not surprising as it marked a demographic moment in which more millennials were looking for their first home as they entered their 30s.