An interesting stat which can give some insight to the national market is the Home-ownership Rate.
It simply looks at the percentage of Americans who own their home instead of rent.
The most recent report from the Census Bureau shows the rate at 64.2%.
Most importantly, this number is showing stability after many years of change.
After many years of hovering around 64%, the Home-ownership Rate started increasing in 1996 and reached as high as 69.5% in 2005.
2008 started several years of declining back to the pre-1996 levels of 64%.
So today it’s back to what seems to be “normal” based the long-term average.
There are several reasons why our Chief Economist does not believe there is a housing bubble today in the U.S.
Below is a slide he shared at our recent market Forecast events.
It shows U.S. Home ownership rate, which is simply the percentage of the population who own their home (versus renting).
The long-term average is 65% represented by the red line.
In the graph you can clearly see the bubble forming. Starting in the mid-90’s, driven by several political and economic factors, more people than ever before became homeowners.
Then, starting in, 2008, the bubble burst and the percentage tumbled back down.
Now, as you can see, we are back at a “normal” level that resembles the long-term average.
If you would like a copy of the entire Forecast presentation, go ahead and reach out to us. We would be happy to put it in your hands.