Homeownership rates are now 67.9%—the highest rate since 2008 and the largest year-over-year increase ever. Last year, homeownership was at 64.1%, according to Redfin, which gathered data from the Census. With social distancing measures in place, this year’s Census did without in-person interviews and that may point to distorted data. But there are several pandemic-related reasons that have led to the homeownership increase: first-time buyers, younger households, remote work, job loss, and low mortgage rates. Read more to see why these factors either helped or possibly skewed the data.
Younger households and first-time buyers drove the homeownership gains
The homeownership rate climbed the most among 35-44 year olds (up 4.9 percentage points to 64.3%) and people under 35 (up 4.2 percentage points to 40.6%). Demographically, we anticipated the homeownership rate would grow in 2020 and beyond because a huge wave of millennials are entering their prime homebuying years. The pandemic may have moved up this timeline in the short-run. Many renters who had perhaps been planning a purchase in the next few years, have opted to go ahead and buy now given historically low rates. Thus the current growth will likely not continue to climb as much in future quarters. These low rates hit at a time when apartment living is at its least desirable. People confined to their homes aren’t able to take advantage of communal building amenities or the neighborhood retail and restaurants that make renting in an urban area appealing.