One would have thought that with the raging COVID-19 pandemic and the high rate of job losses that has been ravaging the economy, the rate of homeownership would have hit rock bottom. But, surprisingly, the industry has instead recorded an unprecedented annual increase in homeownership rates.
According to a report from the Census Bureau, the current rate of homeownership is the highest ever on record. Homeownership rate surged from 64.1% to 67.9%, meaning there is a 3.8% increase in homeowners in America.
Experts, however, warn that the data might not be totally correct because the Bureau changed its methodology of collecting data due to the coronavirus pandemic but, still, it shows that people keep on buying homes regardless of the virus.
The report states that home buying rose sharply among 35-44-year-olds to 64.3% while people under the age of 35 were also not left out as 40.6% of them claimed to have also bought a house during the period.
Though it was earlier projected that the homeownership rate was going to increase among this demographic this year as a vast majority of them were entering their prime homebuying years, it was, however, not expected to be this high.
One ready explanation being bandied around is that the pandemic may have convinced buyers who already had plans to buy in the nearest future to buy now plus with the level of rates being at an all-time low, home buying had become a very intriguing prospect and very affordable for many.
Also, another explanation is that apartment living is also currently not very desirable as people want to take advantage of building amenities that are available to the community coupled with the availability of neighbourhood retail and restaurants which makes renting or owning in an urban area very appealing.
The downside to this is that the current growth may not climb as high in future quarters if the low mortgage rates suddenly rise, but if it remains at its current low rate, then homeownership can continue on this upward trend especially after the virus.
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Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier, M.B.A., is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.email@example.com. Ph: 714- 475-8629.
Eric Lawrence Frazier M.B.A.
President and C.E.O.
The Power Is Now Media Inc.