The minority homeownership rate declined again in the second quarter of 2019, edging down to 46.9 percent from 47.4 percent in the second quarter of 2018. This is its lowest level since the third quarter of 2017.
The most recent release of the US Census’ Housing Vacancies and Homeownership Survey (CPS/HVS)also shows that the overall U.S. homeownership rate declined to 64.1 percent in the second quarter of 2019 from 64.3 percent in the second quarter of 2018 (Figure 1). The recent drop in homeownership rates indicates that eroding housing affordability continues to sideline prospective home buyers.
A recent NAHB blog, which highlights trends in the U.S. homeownership rate, shows that despite strong household formation levels, the change in the number of owner-occupied households fell in the second quarter of 2019, while the change in renter-occupied households expanded. This provides more evidence that ownership is out of reach for many newly formed households.
The minority homeownership rate is calculated using data from black, Hispanic, and Other households. Breaking down the minority homeownership rate shows that the black non-Hispanic homeownership rate continued to slip, going from 42.6 percent in the second quarter of 2018 to 41.3 percent in the second quarter of 2019. This is the lowest homeownership rate among black households since 2004 (Figure 2).
At the same time, the Other homeownership rate fell by 0.7 percentage points to 57.8 percent and the Hispanic homeownership rate remained flat at 46.6 percent. In contrast, the white non-Hispanic homeownership rate increased slightly, going from 72.9 percent in the second quarter of 2018 to 73.1 percent in the second quarter of 2019.
Home prices have appreciated significantly in recent years while income has increased at a slower pace, exacerbating housing affordability. Going forward, these trends may put downward pressure on the overall homeownership rate.
This post brought to you by NAHB Eye on Housing.