Could homeownership's decline be coming to an end?
There are signs that the post-crisis slide in the homeownership rate could finally be ending, according to the 2017 State of the Nation's Housing report from Harvard University's Joint Center for Housing Studies.
"Although the homeownership rate did edge down again in 2016, the decline was the smallest in years," said Daniel McCue, a senior research associate at the center, in a press release. "We may be finding the bottom."
The homeownership rate in the first quarter of this year was 63.6%, which represents only a slight drop from 63.7% in 2015. Homeowner household growth was at its strongest since 2006 last year, and early indicators in 2017 suggest that trend continues, researchers at the center noted.
However, hurdles to homeownership such as inventory shortages and declining affordability remain, and these as well as the availability of mortgage financing could be determining factors in whether homeownership stabilizes this year.
"Any excess housing that may have been built during the boom years has been absorbed, and a stronger supply response is going to be needed to keep pace with demand — particularly for moderately priced homes," said Chris Herbert, the center's managing director, in a press release.
Nearly 19 million households spent more than 50% of their income on housing last year but housing cost concerns are generally higher for renters, the Harvard researchers noted. Inventory shortages exist in rental markets as well as in owner-occupied homes, according to the report.