Drop in U.S. homeownership rate a concern for industry

The nation’s homeownership rate has dropped to its lowest level in more than half a century.
Author:
Updated:
Original:

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.

Related

Tommy’s Slalom Shop Adds Dealer

Boulder Boats has locations in Nevada, Arizona and California.

Trade Only Today Returns Tuesday

The daily e-newsletter will not publish Monday, Jan. 18, in observance of Martin Luther King Day.

Mercury and Crownline Make Supply Pact

Under the agreement, Mercury will be the exclusive outboard and sterndrive supplier for the boatbuilder.

Sea Tow Makes Executive Appointment

Thomas Spina, who has more than 25 years of maritime experience in a variety of roles, was named vice president of franchise operations.

Quick Hits: January 15, 2021

IBEX seeks proposals for session topics; Sensible Yacht Cordage changes hands

Godfrey Marine to Host Virtual Showcase

The event is to take place Jan. 23 and will include Godfrey pontoons and Hurricane deckboats.

Boat Shows Throttling Up

2021 is bringing a new paradigm to the winter boat show season.

Correct Craft Plans Expansions

The moves will allow additional growth for Nautique, Supreme, Ingenity and Watershed Innovation.