Wall Street Journal writer Laura Kusisto reported on Tuesday that, “The U.S. homeownership rate fell in the fourth quarter, frustrating the efforts of policy makers trying to embolden more Americans to buy their own homes as the economy strengthens.
“The share of Americans who own their homes declined to 63.7% in the fourth quarter from 63.8% a year earlier, the Census Bureau said Tuesday.
“The rate hit a five-decade low of 62.9% in the second quarter and had ticked up in the third quarter. It remains well below the historical average of 65%.”
Ms. Kusisto explained that, “Despite improvements in the housing market, the homeownership rate is being dragged down by tight credit and more young households putting off home purchases because of student debt or mediocre wage growth.
“Seemingly positive economic trends such as rising home prices and rents are working against the homeownership rate by making it more difficult for people to save for down payments. And while more young people appear to be leaving their parents’ homes and renting apartments, that in turn drives down the share of households who own.
“In all, 805,000 new households were formed in the fourth quarter compared with the same period a year earlier—of which 54% were renter-occupied.”
The Journal article added that, “A recent Trulia survey found that young people’s optimism about owning a home declined in 2016 for the first time in five years. The share of young adults who said they consider homeownership part of their American dream declined to 72% from 80% a year earlier.”