Keepin' It Real 

Economics, Housing, & Commercial Real Estate Analysis

1/1
Housing100logo.png
ETF express.png
  • Alex Pettee, CFA

Homeownership Rate Climbs, Vacancy Rate Declines

Today, the US Census Bureau released its quarterly Housing Vacancies and Homeownership data. Headlining that report was data that showed that the homeownership rate jumped to the highest level since 2013 at 65.1% as household formations remain strong. Consistent with the demographic trends we've discussed, we forecast a steady uptick in the homeownership rate over the next decade as millennials - the largest generation in American history - begin to enter "ownership age." The <35 year-old ownership rate climbed to the highest since 2011 at 37.6%

Gains in the homeownership rate, however, did not come at the expense of the rental markets. Housing markets remain historically tight as the vacancy rate for both rental and owner-occupied units remains at or near 40-year lows. The rental vacancy ticked lower to at 6.4% in the fourth quarter, the lowest level since 1985. The homeowner vacancy rate, meanwhile, remained steady at 1.4%, barely above the 1.3% rate recorded in 2Q19, which was the lowest homeowner vacancy rate since 1981.

Instead, gains in the homeownership rate came as a result of gains in total household formations. Total household formations rose by 1.3% in 2019 after recording 1.7% growth in 2018, which represented the strongest year for formations since 1985. Given the abnormally large 5-year cohort of 25-29 year-olds, we think that the household formation rate will see continued gradual increases over the next five years as this "mini-generation" enters prime first-time homebuying age. There are roughly 20 million more U.S. households at the end of 2019 as there were at the start of 2000. 

For an in-depth analysis of all real estate sectors, be sure to check out all of our quarterly reports: Apartments, Homebuilders, Student Housing, Single-Family Rentals, Manufactured Housing, Cell Towers, Healthcare, Industrial, Data Center, Malls, Net Lease, Shopping Centers, Hotels, Billboards, Office, Storage, Timber, and Real Estate Crowdfunding.

  • Facebook Social Icon
  • Twitter Social Icon
  • LinkedIn Social Icon

Hoya Capital Real Estate, LLC

Invest@HoyaCapital.com

(833) HOYA-CAP

Hoya Capital Real Estate ("Hoya Capital") is an SEC-registered investment advisory firm that provides investment management services to ETFs, individuals, and institutions, focusing on portfolio and index management of publicly traded securities in the real estate industry. It is not possible to invest directly in an index. Index performance cited in this website or commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Nothing on this site nor any published commentary by Hoya Capital is intended to be investment, tax, or legal advice or an offer to buy or sell securities. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and should not be considered a complete discussion of all factors and risks. Data quoted represents past performance, which is no guarantee of future results. Investing involves risk. Loss of principal is possible. Investments in companies involved in the real estate and housing industries involve unique risks, as do investments in ETFs, mutual funds, and other securities. Hoya Capital has no business relationship with any company discussed/mentioned. Hoya Capital never receives compensation from any company discussed/mentioned. Hoya Capital, its affiliate, and/or its clients and/or its employees may hold positions in securities or funds discussed on this website and our published commentary. A complete list of holdings and other important disclosures and definitions are available by clicking the links below.

Privacy Policy 

 Client Relationship Summary 

Hoya Capital's ADV Part 2

Important Disclosures, Definitions, & List of Holdings 

Seeking-Alpha-Logo.png

The Easy Way To Invest In Real Estate