Recent census data reveals that the US property market is increasingly dominated by renters rather than homebuyers. Homeownership levels are at their lowest for 20 years with particularly high drops in Florida. The data has prompted some analysts to predict that the future of the US real estate market could well lie in rental properties.
The US Census Bureau’s latest report on homeownership in the US has discovered that fewer Americans now own the home they live in. Specifically, the data found that just 64.5 per cent are homeowners, the lowest figure for 20 years.
This percentage drops even further in certain age groups and the trend is particularly strong in young and middle-aged households. Here, the report highlights the lowest levels of homeownership for 30 years. In the under 35’s bracket, 35.8 per cent owned a home in 2014 compared with 41.2 per cent in 1982. For Americans aged between 35 and 44, homeownership now stands at below 60 per cent (in 1982, it was 70 per cent).
In older age groups the fall in homeownership is less pronounced although still significant. Among 45 to 54 year olds, just over 70 per cent are homeowners compared with 77 per cent in 1982. Only among Americans aged over 65 is homeownership higher than it was 30 years ago.
The recent property collapse with subsequent widespread foreclosures is the main reason behind the fall in homeownership. Emerging Trends in Real Estate 2015 reports states that “renter by choice is still a potent force” among many Americans, particularly Millennials (the generation aged 20 to 34) who are “spooked by what happened to their homeowning parents”.
Given the recent history of the US property market, it’s no surprise to find that in geographical terms, Florida is one of the states where homeownership has fallen by the highest rates. Just 10 years ago, it was over 73 per cent and it now stands at 65 per cent. This descent is particularly acute in southern Florida – for example, people who own their home in Orlando now represent 62 per cent, down from 70 per cent in 2005 and in Metro Tampa, homeownership has fallen 7 per cent to 66 per cent.