Facing growing financial obstacles to homeownership, fewer Americans owned a home during the second quarter than at anytime since 1967, data from the U.S. Commerce Department found.
More Americans opted to rent, despite the cost of renting continuing to climb in many large metro areas.
The seasonally adjusted home ownership rate fell to 63.5 percent, the lowest since the government started its tracking decades ago. The rate peaked at 69.4 percent in 2004. It was 63.8 percent in the first quarter.
The residential rental vacancy rate fell to 6.8 percent, the lowest level since 1985, from 7.1 percent in the first quarter.
Nonetheless, household formation is surging. The number of occupied housing units grew, but all on the side of renting. The number of owner-occupied units fell from a year ago.
Multifamily apartment starts rocketed 55 percent in June from June of 2014, according to the U.S. Census. Meanwhile, single-family housing starts increased 15 percent. Remarkably, apartment supply is still far lower than demand. Annual rent growth hit 5 percent in the second quarter of this year, says Axiometrics, a real estate analytics company. Apartment occupancy reached 95.2 percent, a near record high.
“Our results for the second quarter and year to date exceeded our original outlook,” said Tim Naughton, chairman and CEO of AvalonBay, one of the nation’s largest apartment REITs, in the company’s second-quarter earnings Monday. “For the balance of the year, we expect accelerating apartment demand to support stronger performance across our business.”