After hitting an all-time low last year, homeownership rate in the US is expected to significantly increase as owner household formation growth outpaced that by renters during the first quarter of 2017, reported Bloomberg.
Notably, the number of new owners rose by over 850,000 compared with the 365,000 hike in renter households.
An analysis by Trulia of Census Bureau data showed that the 1.1 percent year-on-year gain in owners was the biggest since 2006.
Homeownership rate hit its peak in June 2004 at 69.2 percent but sank to its lowest level in 2016.
This comes as young people leaving home preferred to rent rather than purchase a property – diluting the number of owner-occupant households.
But given the increase in wages and improvement in consumer confidence, first-time home buyers are now being drawn into the market after saving for down payments for years.
“It’s a significant reversal of what we’ve seen,” said Trulia chief economist Ralph McLaughlin. “I was starting to get depressed that we would never see any optimistic news about the homeownership rate kicking up. But now these are signs that we may have hit bottom.”
He noted that President Donald Trump’s proposal to raise the standard tax deduction could help spur homeownership by placing more money into the pockets of Americans as well as providing renters an incentive to save for a down payment.
Increasing prices and the near record-low supplies of listings have been holding back some potential home buyers.
The National Association of Realtors recently revealed that contracts to acquire previously owned homes in the US dipped 0.8 percent in March after increasing the most since 2010 in February.
This article was edited by Denise Djong.
