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Urban Institute Report: Peak Homeownership Reached Nine Years Ago

Homeownership peaked at 67.3% in 2006. The Urban Institute forecasts its decline to the year 2030. Emily Badger of The Washington Post Wonkblog writes on the report released this month that evaluates homeownership rates among different demographics.
June 17, 2015, 11am PDT | Irvin Dawid
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The trend is not temporary. "It won't reverse when the housing collapse fades from memory, nor as the economy picks back up," writes Badger. "By 2030, Urban [Institute] predicts, the U.S. homeownership rate will be as low as 61.3 percent — a number we haven't seen in half a century."

Today's rate is 63.6 percent according to the latest (American Community Survey) ACS numbers, notes the Introduction to the June 2015, 62-page report: "Headship and Homeownership: What Does the Future Hold?" [PDF]. The Urban Institute is "a nonprofit, nonpartisan policy research and educational organization that examines the social, economic, and governance problems facing the nation."

By contrast, "(h)omeownership rates averaged around 64 percent until about 1990, when they began to climb dramatically," note the report's authors, Laurie Goodman, Rolf Pendall and Jun Zhu.

The challenge is whether developers will accommodate the growing need for rentals and whether cities are prepared for them. "Between 2010 and 2030, according to the report, a majority of the estimated 22 million new households that will form in America will be renter households," writes Badger.

Developers will have to cater more to renters, many communities will need more apartments, and single-family homes that weren't originally built for renters will increasingly be used by them.

Badger concludes by suggesting that "maybe we'll even change how we think about homeownership, which has long been viewed as a norm in America to which everyone should aspire."

Badger's coverage approaches the Urban Institute Report from a different angle than Wall Street Journal coverage shortly after the report was released, which described decreasing homeownership rates with rising rental costs as the hallmarks of a future housing crisis.

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Published on Tuesday, June 16, 2015 in The Washington Post - Wonkblog
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