After this chart at the top, the rest of the article is an in-depth look at race, lending, and housing in the Los Angeles area. While some of the story involves factors pre-1960s, there is also much after the Civil Rights Movement that has limited homeownership. All groups on the chart had higher homeownership rates into the early 2000s but conditions changed for Blacks such that they experienced a decline.
All of this makes the recent efforts in Evanston, Illinois, just north of Chicago, all the more interesting. The discussions of reparations there have settled on providing funds for housing. From the City of Evanston FAQs:
In July 2019, the Equity and Empowerment Commission held community meetings to solicit feedback from community members on what reparations would look like for the City of Evanston. Affordable housing and economic development were the top priorities identified during those meetings. A report was submitted to the City Council for consideration and was the basis for Resolution 126-R-19, “Establishing the City of Evanston Reparations Fund and the Reparations Subcommittee.”
Reparations, and any process for restorative relief, must connect between the harm imposed and the City. The strongest case for reparations by the City of Evanston is in the area of housing, where there is sufficient evidence showing the City’s part in housing discrimination as a result of early City zoning ordinances in place between 1919 and 1969, when the City banned housing discrimination.
If indeed homeownership jumped nearly three percentage points in one year, this is a big shift. In the historical data table from the Census (Table 14), it is rare to find huge jumps year to year. The fallout from the late 2000s happened in relatively small decreases.
A big jump in 2020 has implications for multiple actors: communities with new residents and others losing residents; those involved in the housing industry from develoeprs to realtors to investors to landlords; residents as those with resources took advantage of purchasing opportunities while others struggled to hold on and payments are looming.
How will these dueling pressures – buying homes amid COVID-19 and low mortgage rates at the same time as economic uncertainty – play out?
The two states with the lowest levels of homeownership are not surprising given their housing prices and large urban areas though I would guess many people would not pick Nevada and Texas to be there. On the other end, the five states with the highest homeownership rates tend to be less dense and more affordable. If, as the article before the rankings suggest, homeownership is indeed a marker of the American Dream, does that mean the people in these five states with the most homeownership are more likely to be living the American Dream? I’m guessing there would be some debate about that.
The homeownership rate for Americans under 35 jumped to 36.8 percent in the third quarter, highest in five years, the Census Bureau said Tuesday. The share of millennial homeowners was up sharply, from 36.5 percent in the second quarter and 35.6 percent a year earlier. That’s still below the historically normal 40 percent-plus share for Americans that age.
But the young adults, largely first-time homebuyers, drove the national homeownership rate to 64.4 percent – highest since 2014 – from 64.3 percent the prior quarter…
Skylar Olsen, director of economic research for real estate site Zillow, says the slowing housing market actually has aided millennials who are facing somewhat less competition as they hunt for their first home…
The surge in millennial homeownership is a sign the recent housing slowdown is likely temporary, McLaughlin says. “Because that group is so big, it can help support the U.S. housing market indefinitely,” he says.
“We took a strong approach to diversity back in the 1970s and 1980s,” De Graff said. “We passed the strongest fair housing ordinance in the nation.”…
Flossmoor and South Holland are among towns where policies embrace values of diversity. On Aug. 20, the Flossmoor Village Board adopted a set of “Guiding Principals for Diversity & Inclusion.”…
“The white population of this area shrank dramatically from a majority of 62.6 percent in 1990 to 37.6 percent in 2000,” his report said…
Mayors offered other analysis about the Pew report that sheds light on why several south suburbs lead the nation in black homeownership rates. Burke and De Graff said Olympia Fields and South Holland have few multi-family housing units and that their communities consist mostly of single-family homes.
On the other hand, the story hints at ongoing difficulties. The homeownership rate for blacks on the whole in the United States is still low: 41%. The suburbs just to the west of these suburbs – categorized in the story as southwest suburbs – have a very low percentage of black residents. Finally, the white population dropped in these suburbs in the 1990s as blacks moved in. White flight continues.
Does this all represent success – access to the suburban American Dream for blacks – or an ongoing story of exclusion as whites flee and limit black homeownership to a relatively small portion of a large metropolitan area?
Comparing rates of homeownership may not tell the whole story of what kinds of homes are owned or the size of these homes. Famously, the United States has the largest new homes in the world. So perhaps Americans do not just want to own a home; they want a certain kind of home – a sizable single-family home in the suburbs – that meets their standards.
Burns predicts the homeownership rate will continue to fall through 2025. Which means that millennials will be renting for a lot longer than their parents’ generation did.
In 2004, when the overall homeownership rate peaked at just under 70 percent for all age groups, those born in the 1970s were 25–34 years old, moving out on their own and forming new households…
Today, with mortgages harder to get and memories of the housing bust fresh in buyers’ minds, the homeownership rate among 25–34-year-olds has fallen to just 39 percent…
Based on his estimates, the overall homeownership rate will fall to just 60.8 percent by 2025, the lowest since the mid-1950s.
As noted in the last paragraph of the article, there will still be more homeowners than before (because the population of the United States continues to increase) but the percentage of Americans owning homes will drop. If the rate matches that of the mid 1950s, we would be back in a early suburban boom era except it would be hard to imagine a similar new boom on the horizon.
Overall, home ownership, the cornerstone of the American Dream, is down to 63 percent, a far cry from the 69 percent registered in 2004. The Joint Center for Housing Studies of Harvard University’s annual “State of the Nation’s Housing” report said current home ownership percentages rival that of 1993.
Those figures, however, are much worse for minorities, especially blacks. “The homeownership rate for minorities continues to lag: It peaked at 51.3 percent in 2004, and has now fallen to 47.2 percent. Of all minority groups, African Americans have the lowest rate of homeownership, just 43.8 percent,” said the report.
The reason for the decline is the languishing economy and poor pay. Harvard said that a key factor is the “steady erosion” of incomes since the recession began.
While I would assume most politicians would continue to support the idea of homeownership (and most major politicians since the early decades of the 1900s have done so), I haven’t really heard much about this in policy debates. Perhaps this is because other issues – immigration, gay marriage, taxes – have been in the spotlight but homeownership was a pretty foundational idea for much of the last century of American life. Or, perhaps this is because few people have ideas for how to increase homeownership, especially with the housing crisis of the late 2000s still looming large in the rearview mirror.
The homeownership rate in the United States dropped to a 20-year low of 64.5 percent in 2014, according to new data released by the Census Bureau…
In the years since 1984, which is the first year reported on Table 15, homeownership peaked at 69.0 percent in 2004. In the last decade, according to the Census Bureau, the annual homeownership rate has steadily declined…
Among the 75 largest metropolitan statistical areas in the nation, as reported in Table 16 in the Census Bureau’s “Housing Vacancies and Homeownership” data, the Los Angeles-Long Beach-Santa Ana area had the lowest homeownership rate in 2014. At 49.0 percent, it was the only one of the top 75 metropolitan statistical areas that had a homeownership rate of less than 50 percent.
New York-Northern New Jersey-Long Island had the second lowest homeownership rate at 50.7 percent. Bakersfield was third lowest with 52.8 percent. Las Vegas-Paradise as fourth lowest with 53.2 percent. Fresno was fifth lowest with 53.9 percent…
The Richmond, Va., metropolitan area had the highest homeownership rate at 72.6 percent. Birmingham-Hoover, Ala., was second highest with 71.9 percent. Grand Rapids-Wyoming, Mich., was third highest with 71.6 percent. Detroit-Warren-Livonia was fourth highest with 71.2 percent. And St. Louis, Mo., was fifth highest with 71.1 percent.
While it is one thing to track this rate over time, what are the larger implications? How should policy decisions change? Are there some who see this as desirable? How might the housing industry rebound?
In the second quarter of 2014, the rate of homeownership among householders who are under 35 dropped to the lowest number ever reported since the Census Bureau first started recording quarterly homeownership rates 21 years ago.
In a news release published this week, the Census Bureau said that the homeownership rate among householders under 35 was 35.9 percent in the second quarter of 2014. That number was not only lower than any quarterly rate going back to the fourth quarter of 1993 (the first quarterly rate reported) but was also lower than any of the annual homeownership rates for under 35s that the Census Bureau has published since 1982.
However, a Census Bureau official also said that the 35.9 percent homeownership rate for under 35s for the second quarter was not statistically different from the rate for the first quarter of this year (36.2 percent) or the fourth quarter of 2013 (36.8 percent).
These figures on their own could support a number of different arguments about the fate of homeownership in the United States. On one side, those promoting more urban lifestyles could say millennials aren’t buying more homes because they are moving to cities and looking to rent units in order to have more flexibility and take advantage of the urban lifestyle. On the other side, others might note that this data comes 5+ years into the bursting of a housing bubble and that millennials will show more interest in homeownership when the economy picks up. Yet, to make such claims with this data alone would be irresponsible. To be honest, we need a lot more data than this to support any argument and know whether younger Americans do or do not want to own homes in similar numbers to past generations.
See the full Census report regarding 2Q homeownership rates here.