If it feels as if your parents could afford to buy a house when they were your age, and you can’t, you’re not alone. The homeownership rate in the U.S. has hit a historic low, and a big part of that is a significant drop in ownership among younger Americans.
“The homeownership rate — the percentage of households that own rather than rent the homes that they live in — has fallen sharply since mid-2005,” says a blog post on Liberty Street Economics. “In fact, in the second quarter of 2016, the homeownership rate fell to 62.9 percent, its lowest level since 1965.”
A part of that decline is related to demographics. The 45-and-over population has increased, and older people are more likely to have a house.
However, younger people are also now less likely to own a home than they were 10 or 20 years ago, as the chart above highlights.
“There has been a secular decline in the incidence of homeownership for people aged 25 to 64,” the note said. “Why this secular decline is occurring is unknown. Some potential explanations are declining real incomes for some households and changes in tenure preferences, perhaps related to increased urbanization.”