The homeownership rate in the United States has been on a steady decline since reaching a peak of 69.2 percent in 2004. The rate fell to a 48-year low of 63.4 percent in the second quarter of 2015 before clawing its way back up to 63.8 percent by the end of the year.
While the homeownership rate is inching its way back upward, it is still below its peak across all age groups—particularly among consumers ages 44 and younger, according to the Wells Fargo 2016 Housing Market Outlook.
For consumers between the ages of 35 and 44, the homeowership rate at the end of 2015 (59 percent) was about 11 percentage points off of its peak of 70 percent from 10 years earlier. For consumers under the age of 35, the homeownership rate at the end of 2015 was about 9 percentage points lower than its peak from 10 years earlier (34 percent compared to 43 percent).
The age group with a homeownership rate at the end of 2015 that was closest to its peak was the 65 and older group, which had a rate of 80 percent at the end of 2015 compared to slightly below 78 percent at the end of 2005.
The dramatic decline in the homeownership rate has coincided with an equally dramatic rise in the number of renter-occupied households over the last 10 to 12 years, according to Wells Fargo.
The number of renter-occupied units, meanwhile, bottomed out at below 34 million in 2004 but has increased every year since. By the end of 2015, there were 42.6 million renter-occupied units in the United States. These two phenomena are unrelated, however, according to Wells Fargo.
“The number of renters would have increased even if the homeownership rate had not declined so sharply and will continue to increase even as the homeownership rate recovers,” the report stated.
Click here to see the complete Wells Fargo 2016 Housing Market Outlook.