Homeownership Rate in U.S. Dips in Q1, First Time in 2 Years

According to HUD, the U.S. national vacancy rate in the first quarter 2019 was 7.0 percent for rental housing and 1.4 percent for homeowner housing. The rental vacancy rate of 7.0 percent was virtually unchanged from the rate in the first quarter 2018, but 0.4 percentage points higher than the rate in the fourth quarter 2018 (6.6 percent). The homeowner vacancy rate of 1.4 percent was 0.1 percentage point lower than the rate in the first quarter 2018 (1.5 percent), but not statistically different from the rate in the fourth quarter 2018.

The homeownership rate of 64.2 percent was virtually unchanged from the rate in the first quarter 2018, but 0.6 percentage points lower than the rate in the fourth quarter 2018 (64.8 percent).

Approximately 87.9 percent of the housing units in the United States in the first quarter 2019 were occupied and 12.1 percent were vacant. Owner-occupied housing units made up 56.5 percent of total housing units, while renter-occupied units made up 31.4 percent of the inventory in the first quarter 2019. Vacant year round units comprised 9.2 percent of total housing units, while 2.8 percent were for seasonal use.

Approximately 2.4 percent of the total units were for rent, 0.8 percent were for sale only and 0.7 percent were rented or sold but not yet occupied. Vacant units that were held off market comprised 5.3 percent of the total housing stock -- 1.5 percent were for occasional use, 1.0 percent were temporarily occupied by persons with usual residence elsewhere (URE) and 2.9 percent were vacant for a variety of other reasons.

Joel Kan, MBA Associate Vice President of Economic and Industry Forecasts says, "The homeownership rate decreased to 64.2 percent from 64.8 percent in the first quarter, the first drop in two years. As seen in today's report, the market volatility and decline in consumer confidence that we saw in late 2018 and early 2019 seemed to confirm what other housing indicators showed: a somewhat slow first couple of months of the year for the housing market."

Kan continued, "A large portion of the decline was driven by the younger age groups, both households under 35 and households between 35 and 44 years old. Owner occupied households grew at a slower rate than the past two years, but still exceeded 1 million in the first quarter. Renter households increased almost 500,000 compared to a year ago."