The nation’s homeownership rate has dropped to its lowest level in more than half a century, just a decade after it had soared to its highest level.
Analysts say the rate could drop even lower in the months to come, even after it hit a 51-year low.
During the second quarter of this year the rate fell to 62.9 percent, not seasonally adjusted, the same as it was in 1965, when the U.S. Census started tracking the metric.
During the housing boom in the mid-2000s the rate rose as high as 69.2 percent.
The health of the boating industry has long been tied to the housing market.
“It is not surprising homeownership is at an all-time low, given the weakness in the housing market for nine years,” Thom Dammrich, president of the National Marine Manufacturers Association, told Trade Only Today. “However, it is likely this is the bottom of homeownership, and continued improvement in home sales, as homeownership returns to normal levels, bodes well for a brighter future for our industry for many years.”
Some industry analysts believe the housing market has reached bottom; others think the softness will continue.
The drop in homeownership is largely attributable to a delay in home buying by millennials, according to CNBC. Millennials have the lowest ownership rate of their age group in history. Millennials are not only burdened by student loan debt, but they also have also delayed life choices such as marriage and parenthood, which are the primary drivers of homeownership.
The rental market is strong across the nation, which has meant a sharp rise in rents; that, in turn, keeps many young renters from being able to save for a down payment on a home.
It is also more difficult to qualify for a mortgage today than it was during the last housing boom. Home prices have been rising at a far-faster clip than wage growth or employment growth. In addition, the supply of entry-level homes for sale continues to drop. Add it all up, and young buyers are continuing to rent longer.
Although closed sales improved during the spring, an index of signed contracts to buy existing homes was weaker than expected in June, suggesting that sales will not be as strong for the rest of 2016. The homeownership rate fell in all regions of the country.