Photo: James Bombales
In spite of the ongoing COVID-19 pandemic and subsequent recession, the US homeownership rate has risen to the highest level since the third quarter of 2008.
A new report released by the Commerce Department this week pegged the homeownership rate at 67.9 percent in the second quarter of 2020, which stretched from April 1st to June 30th. That’s an increase of 3.8 percentage points compared to the same period last year and 2.6 percentage points over the first quarter of 2020 when the rate stood at 65.3 percent.
The homeownership rate among Americans under the age of 35 ticked up to 40.6 percent, an 11 percent boost from Q2 2019. Millennials, who have now entered their prime homebuying years, are taking advantage of historically low mortgage rates and the proliferation of work-from-home policies, allowing them to house hunt in more affordable markets.
A recent survey conducted by the National Association of Realtors suggested that the share of first-time buyers who purchased an existing home amounted to 35 percent of total sales in June, up from an average of 29 to 32 percent recorded over the past eight years.
The homeownership rate increased across the board for all race categories compared to the second quarter of last year. Black homeownership rates improved the most, increasing from 40.6 percent in Q2 2019 to 47.0 percent in Q2 2020. Racial inequality in homeownership still persists, however. The rate of non-Hispanic whites who own their own home equated to 76 percent during the same period.
The data collection method employed by the US Census Bureau was affected by the onset of COVID-19. The agency suspended in-person interviews and instead relied upon telephone interviews to gather information during the second quarter. This may have skewed the results in a positive direction.
“The housing market is doing really well,” said realtor.com Chief Economist Danielle Hale. “It’s likely the homeownership rose, but I don’t think it’s likely that it rose that much.”