March 02, 2018
Homeownership Rates Expected to Rise This Year
Homeownership rates shifted slightly up in 2017 for the first time in a decade. According to the latest statistics from the Census Vacancies and Home Ownership report, Q4 2017 was also the fourth consecutive quarter in which new homeowners outnumbered new renters.
The increase was not only attributed to favorable economic conditions, but to an increase in homeownership among both Gen Xers and Millennials. Members of both generations are very slowly beginning to transition from renting to homeownership in greater numbers, despite many challenges to homeownership like high prices and low home inventory.
How Do Americans Feel About Home Ownership?
According to a recent survey by Trulia, 72% of Americans still believe that the “American Dream” includes home ownership. And 73% of Millennials had this sentiment as well, 1% more than in 2016.
While many Millennials aspire to own homes, 65% said they don’t plan to actually make home purchases until 2021 or later.
What Are the Main Barriers to Millennial Homeownership?
Of Millennials who are currently renting but plan to buy in the future, here are the obstacles that they say are preventing them from buying homes now:
- Saving for the down payment – 66%
- Rising home prices – 47%
- Qualifying for a mortgage – 37%
- Having a poor credit history – 31%
- Not having a stable job – 35%
- Inability to pay off current debt – 26%
- Rising mortgage rates – 19%
- Limited home inventory – 4%
- Other – 10%
- None – 2%
2018 Expected to Be Better Year to Buy a Home
Based on its survey results, Trulia predicts that this could be a better year to buy a home than 2017. That’s because prices may level off a bit, due to increased inventory, the enthusiasm for home selling outpacing home buying, and very localized shifts in demand in housing markets prone to natural disasters like floods, hurricanes or wildfires.
Almost 40% of Americans reported that they are concerned about the potential threat of a natural disaster affecting their homes, especially in the South which is more susceptible to hurricanes and flooding.
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