Homeownership Reality In America 2017


Today the Census Bureau released their data on home ownership and rental vacancies, which showed an insignificant change in home ownership rates, year over year, of  63.7% from 63.8%

The homeownership rate in Q4 2016 was 63.7%, not statistically different from Q4 2015 rate of 63.8%.


The rental vacancy rate in Q4 2016 was 6.9%, not statistically different from Q4 2015 rate of 7.0%.


I have long maintained that the real home ownership rate, once adjusted to demographics and delinquent loans, is between 62.2%-62.7%. We got to a low of 62.9% last year and have maintained above that level since. If we breach 62.2% in this economic cycle, I will be terribly surprised because the demographics for home ownership is starting to get better and 90 day delinquent loans are much less today.

This economic cycle was very unique. We had a massive speculation debt bubble in housing with a lot of debtors without the capacity to repay,  in the system. Then we ran right into a prime age labor force peak and decline.

From Calculated Risk




Remember that the Census counts all home owners, regardless of the status of their loans, until they legally lose their title to the home.  The gradual fall (rather than a precipitous fall) reflects this fact. The foreclosure process can be very long, especially in  judicial states and  those with a lot of loan modifications as most of these loans will eventually fall into foreclosure.

To reiterate my main thesis for housing in this economic cycle.  we simply won’t have enough qualified home buyers to have a real recovery. By the years 2020-2024 we will start to see a significant  homes purchases with mortgages.

Housing inflation is my main concern.  But we will soon have a much better demographic profile in the U.S. to drive housing demand. But,  make no mistake, the housing inflation story is real and it has impacted demand for many years now.

Here in California  limits on construction have affected affordability. The legal battles that limit construction are as much of a road block as profitability issues  for the builders.   NIMBY  ( Not In My Back Yard) is a real issue here.   If renters want to be come homeowners they will have may have to start voting against the restraints put on developers.
From Doug Short:


Note: I attended the California Association Of Realtor Conference at Indian Wells last Friday and enjoyed taking part some very interesting discussions. I presented on the macro-economic outlook for the US.

My quick economic take was that Americans should relax.   There seems to be a pervasive fear of a President Trump White House. Demographics in America are getting better and inflation is low. Outside of commercial real estate, there isn’t much in terms of over-investment, that could set us up for a recession in 2017. Regarding fears of  trade wars,  so far President Trump is only talking about companies that plan to leave the U.S. to go to Mexico,  not companies that have existing plants.  The manufacturing labor cost in America is $20 compared to $3 in Mexico.  Labor costs in China have been rising over the years. The 20%  mexico import tax is just a idea being thrown out to pay for the border wall too. Any tax reform or infrastructure package won’t happened until 2018 so for this year at least, you can ignore all the political noise.

As long as leading economic indicator are positive, the Fed doesn’t see the need to take steps to fight inflation  and unemployment claims stay low, we will be fine. If those 3 factors change, it will be a different ball game.


Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing marketLogan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami