Generation X recovery boosts homeownership rate - MarketWatch

Homeownership among 35-44-year-olds, the group most devastated 

by the housing crisis, is rising

No housing analyst wants to be a cheerleader for an artificially high rate of ownership, but most think a higher level would suit the economy and society better.

More Americans became homeowners last quarter, and in an optimistic sign for the housing market, their numbers were boosted by the generation that got smacked the hardest by the crisis of a decade ago.

The national homeownership rate rose to 63.9% in the third quarter, the Census Bureau said Tuesday. That’s up from 63.7% in the second quarter and 63.5% a year ago. Even better, the number of owner-occupied households rose more quickly than the number of renter-occupied households for the second straight quarter.

Because the Census Department’s ownership report spans so much time, it can be hard to discern trends from the data. But now, with multiple quarters confirming the uptick both in the overall rate and the spread between owners and renters, it seems clear that housing in America has turned a corner, said Ralph McLaughlin, chief economist for Trulia.





“Last quarter seems to be an inflection point,” McLaughlin told MarketWatch. “Renters are making the conversion to buying.”



There’s another signal of an improving housing landscape in the Census report. Americans aged 35-44 had by far the biggest improvement in homeownership. That age group saw nearly a full percentage point increase over the past year, compared to a more moderate but still solid 0.6 percentage point for those under 35, and a flat reading for those 45 to 54.



Generation X-ers were “really hit hard by the crisis,” McLaughlin said. Americans in that age group bought homes in an overheated market and then saw the crisis crater their home equity, jobs, and credit scores.



Earlier research has shown that Generation X were also more likely to have sold a distressed home — which by definition signals that they were more likely to have had trouble paying a mortgage.





Such reminders of the housing crash are why McLaughlin and other housing watchers are careful not to be seen as advocating an ideal rate of homeownership. Still, McLaughlin called himself “optimistic.”



He and other analysts believe the national homeownership rate should achieve a “healthy equilibrium,” somewhere between the extremes of the bubble and the post-crisis rock-bottom level.





And as McLaughlin pointed out, more homeowners wouldn’t just signal a healthier housing market, but more consumer confidence and a stronger economy.



Published: Nov 3, 2017 8:19 a.m. ET:

Generation X recovery boosts homeownership rate - MarketWatch