Rental Vacancy at 12-Year Low, Homeownership Rate Steady
According to the Census Bureau’s quarterly survey, rental vacancy fell 10 basis points to 8.2 percent. Prior to the second quarter of 2013, vacancy rates have not been this low since 2001. The tightening rental market is a reflection of an improving economy. The trend could also be an indication of future housing demand as renting is typically a first step in household formation.
Homeowner vacancy, provided in the same survey, increased in the fourth quarter of 2013. The current reading is 2.1 percent or 20 basis points above last quarter. The current reading is also 20 basis points above the fourth quarter of 2012.
The seasonally adjusted homeownership rate, according to Census data, was 65.1 percent during the four quarter of 2013. The seasonally adjusted rate has held constant for three consecutive quarters. The current seasonally adjusted rate is well below the historical 20-year average of 66.8 percent.
The homeownership rate not adjusted for seasonality was 65.2 percent during the fourth quarter of 2013. The unadjusted rate is down slightly from last quarter (0.1 percentage points) and from one year ago (0.2 percentage points).
Homeownership rates increased over the third quarter of 2013 for those aged between 45 and 54 and those aged 54 and 64. Homeownership rates decreased over the third quarter of 2013 for those aged between 35 and 44 and those aged over 65. Homeownership rates held steady for those aged under 35.
For the most recent reading, the largest percentage point increase from last quarter occurred for households headed by those aged between 55 and 64 years, who saw an increase of 0.3 percentage points. The largest percentage point decrease from last quarter occurred for households headed by those aged over 65, who saw a decline of 0.5 percentage points.
Across regions, homeownership rates increased over the third quarter of 2013 in the Midwest and South. Homeownership rates decreased from last quarter in the Northeast and West. For the most recent reading, the largest year-over-year percentage point decline in homeownership occurred in the Northeast (1.1 percentage points). The West historically has the lowest homeownership rate among all four regions. The homeownership rate for the most recent quarter is 59.3 percent in the West versus a homeownership rate of 69.8 percent in the Midwest.
View this original post on the NAHB blog, Eye on Housing.