While the homeownership rate increased in the second half of 2015, it was more recently on the decline according to the U.S. Census Bureau. It is now at 63.6 percent, the third lowest rate on record.
Younger Americans are having a large affect on this decline. One reason many Americans in a younger generation do not own a home is because of their high student loans.
“The rising student loan debt is holding back first-time buyers, still hovering around 30 percent of all home buyers rather than the typical 40 percent,” says NAR’s Chief Economist Lawrence Yun in his most recent column for Forbes. “That is why the homeownership rate still remains at near 50-year lows at 63.6 percent in the first quarter. Among those aged under-35, the ownership rate fell even more markedly and was 34.2 percent in the latest quarter.”
While many who do not own homes rent instead, high rent costs make it hard for them to afford to buy later on.
“Rental affordability remains a big problem in many places, and that makes it harder to save for a downpayment,” Jed Kolko, an independent economist and senior fellow at the Terner Center for Housing Innovation at University of California, Berkeley, told CNBC. “We’re still seeing relatively few first-time home buyers because young people are buying homes later than they used to. Some of this is a long-term shift toward marrying and having children later in life. Some of this is that the recovery has been slow among young adults.”
On the contrary, the homeownership rate among older Americans is on the rise.
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