Homeownership Is Rising While Rent Renting Dips
Mortgage Banker Association forecasts for purchase originations to increase around 4% to $1.24 trillion in 2019, with another year of growth to $1.27 trillion in 2020. What’s behind the optimistic forecast? According to the U.S. Census Bureau, there were 1.6 million additional owner-occupied households in 2018 – the largest annual increase since 2004. In addition to the healthy labor market, improving supply conditions (in some markets) and moderating home-price growth, downsizing baby boomers and more millennials entering their prime buying years are creating sustained demand for home purchases. This week’s chart takes a look at the annual change in owner-occupied and renter households from 2002-2018. After nine years of mostly contraction in owner-occupied households, it’s hard not to notice that 2018 was the third straight year of growth. This trend is likely to continue.