July 26, 2018

Enterprise Releases New Interactive Report on Trends in Owned and Rented Housing

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Enterprise has just released a new report that examines how tenure rates by age, race/ethnicity, and income differ from the national trend over time, resulting in uneven distributions of owners and renters. 

This report draws upon data published today by the U.S. Census Bureau’s Housing Vacancy Survey (HVS), which found that the share of households owning their home in the second quarter of 2018 was 64.3%, up from 64.2% in Q1 and 63.7% in Q2 2017. The number of homeowners in the U.S. reached 77.9 million, compared to 43.3 million renters (35.6% of all households).

The new data continue trends in housing tenure (i.e., owning versus renting) that started in mid-2016 after a 12-year period of declining homeownership and increasing rentership. They come at a time of recent dramatic increases in both rents and house prices nationally, placing affordability pressures on households not already in an owned home.

Looking at only the aggregate figures, however, masks important variation in housing tenure trends among some subsets of U.S. households. Enterprise has developed a series of interactive graphics that examine disparities in the tenure shares of specific groups through the late-1990s and early-2000s housing boom, the late-2000s downturn, and the current recovery. 

These charts show that while all subsets of households saw increases in homeownership during the boom, the magnitude of these gains varied. Groups traditionally more likely to rent – including younger households, minorities, and those with below-median incomes – experienced the greatest changes. During the subsequent housing downturn, senior, Hispanic, and Asian households managed to retain most of their homeownership gains, while groups such as black and middle-aged households returned to or exceeded their pre-boom shares of renting households. Since 2016, with the overall homeownership rate rising again, different groups have followed noticeably different patterns:  young, low-income and Hispanic households have the biggest growth in homeownership; rates for high-income and white households remain steady; and senior homeownership rates actually declining.

Analysis of tenure differences highlights inconsistencies in how the housing market serves households with different socio-economic characteristics. Demand for homeownership is nearly equal across subsets by race, income, and age (over 45 years old), but uneven access to mortgage financing and down payment funds inhibit the ability of some groups to buy as easily and often as others. Meanwhile, construction of new rental housing lags the growth in renter households, particularly in areas populated by groups with higher rentership rates. This failure of supply to keep pace has led to rising rents in many places. 

Disparities in tenure rates can have significant consequences for future housing and economic outcomes. Groups with higher shares of homeowners are more likely to grow their wealth over time, which provides greater economic opportunities for themselves and their descendants. Those with more renters will not realize these benefits, and over time will find it even harder to narrow their tenure gaps with high-homeownership households.

There is also an obvious disconnect between housing markets and public policies. Millions of households, including the majorities of some groups, rely on rental homes to meet their housing needs. Yet federal housing policy devotes considerably greater resources toward homeownership, through its support for the residential mortgage market and tax benefits like the mortgage interest deduction. In addition, federal programs aimed at providing and promoting affordable rental housing serve only a fraction of eligible low-income households, while millions more moderate-income renters receive no benefits or assistance. These inequitable policies disadvantage groups with higher rentership rates.

Policymakers must act to address these enduring gaps in homeownership and rentership rates. Housing policies should be amended to not favor one tenure over the other, but instead to promote a range of housing options. In the end, it is not owning or renting that should matter, only that all households have access to housing that is affordable and suitable to their needs and circumstances.

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