According to the current report of the US Census Bureau, more Americans choose to own a home over signing a lease to rent in the first quarter of 2017. This is the first time since 2006 where the amount of new homeowners outnumber the number of new renter households.
Americans choose to own and are jumping straight into home ownership rather than renting first. Of the 1.22 million new households that were formed in the first quarter, 854,000 were new-owner households.
This means the home ownership rate for new households was 70%!
That is huge news as the national home ownership rate is currently 63.6% and was only near this number back in the second quarter of 2004, when home ownership was at an all-time high of 69.2%. These numbers show people choose to own instead of rent.
A current Wall Street Journal article pointed to the rise in first-time home buyers coming to market as a reason for the jump:
“The return of first-time buyers is accelerating. In all they have accounted for 42% of buyers this year, up from 38% in 2015 and 31% at the lowest point during the recent housing cycle in 2011, according to Fannie Mae, which defines first-time buyers as anyone who hasn’t owned a home in the past three years.”
Ralph McLaughlin, Trulia’s Chief Economist, had this to say about what a bump in new homeowner households could mean for the housing market:
“Strong renter household formation is one of the reasons why the home ownership rate has continued to drop since the onset of the housing crisis, so any sign this trend is reversing is something to take note of. We look forward to future releases of these data to determine whether this is a statistical blip or a trend.”
As more and more potential first-time buyers realize their ability to buy a home without having to rent first, not only will the home ownership rate benefit, but so will the overall economy.
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