MBA: Homeownership Rate Keeps Dropping

Posted by Patrick Barnard on April 23, 2014 No Comments
Categories : Residential Mortgage

With homeownership now out of reach for more Americans – due to a lackluster job market, stagnant wage growth, rising home prices, rising interest rates, tighter lending standards and rising inflation – the single-family rental market is on fire.

According to the Mortgage Bankers Association (MBA), about 12% of U.S. households now live in single-family rentals.

Historically, about 65% of Americans owned their homes, but with home affordability now spiraling upward out of reach, that number has fallen to 63% and could fall as low as 62%, says Sam Khater, senior economist with CoreLogic, in an article published recently in the MBA's daily e-newsletter.

The MBA's data shows that the single-family rental market has, for the past five years, grown to become the largest rental market segment – even larger than the 10-plus-unit rental market.

During the MBA's recent Single-Family Rental Summit, Jamie Woodwell, president of commercial/multifamily research, explained that demand for single-family rentals has been increasing ever since the housing crisis began in 2007.

"We've seen large growth in the 20-35 year-olds as a rentership demographic; and key drops in the 35-55 year-olds as they move into homeownership," he said. "In the less than 30-year-olds, we see very few homeowners; as they get older, the homeownership horse race begins."

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