Homeownership in the United States lost a little more ground last quarter, declining to a new 19-year low as consumers—particularly young adults—continue to grapple with debt and difficulties obtaining credit.
According to an estimate from 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. It was the lowest rate since 1995.
Homeownership continued to slide among the millennial age group, who find themselves more burdened than other groups by high debt, tight credit conditions, and limited job prospects. The percentage of young adults who own their homes was 35.9 percent last quarter, down nearly a full point from last year.
As housing trends move in a healthier direction, one of the biggest headwinds has been 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.
While today's young adults have so far been inactive compared to historical norms, a recent report from NAR suggests a number of markets, particularly those in the Midwest and West, are likely to see more activity from millennials as labor market conditions and home prices create a more favorable market for buyers.
As millennials age and start to hit their own life milestones, the group expects to see a resurgence in younger homebuyers.
"Millennials will eventually settle down, trade their roommates for spouses and want to raise a family," commented NAR President Steve Brown on the study. "As long as median income continues to support purchasing power in most areas, the demand and opportunity will be there for Millennials to purchase their first home with guidance and insights from a Realtor."