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Homeownership in the United States lost ground in the second quarter, declining to a new 19-year low as consumers—particularly young adults—continue to grapple with debt and difficulties obtaining credit.
According to the Census Bureau, the U.S. homeownership rate was 64.7 percent in the second quarter, a decrease of 0.1 percentage point from the first quarter's previous low and 0.3 percentage points from the same time last year, making it the lowest homeownership rate since 1995.
The percentage of young adults who own their homes was 35.9 percent last quarter, down nearly a full point from last year. Though housing trends are moving in a positive direction, one significant hurdle to overcome is a lack of activity among first-time homebuyers, who historically account for 40 percent of sales activity, according to the National Association of Realtors (NAR). Through this year, that share has hovered around 28 percent due to high debt, tight credit conditions, and limited job prospects.
The U.S. economy experienced a turnaround from the first quarter to the second, fueling hopes of a rebound as the rest of the year plays out. Real gross domestic product increased at an annual rate of 4.0 percent in the second quarter of the year, according to the Commerce Department, and the consensus forecast among economists calls for an increase of 3.1 percent. GDP for the first quarter was also revised to reflect a 2.1 percent drop instead of an estimated 2.9 percent contraction reported previously. The government's second estimate for Q2 GDP, which will offer a more complete look at data, is scheduled for release August 28.
