The Census Bureau reported This Week in Real Estate that the U.S. homeownership rate increased in the fourth quarter of 2018 to 64.8 percent – the highest rate since 2014 – driven mainly by a rise in the 35-44-year-old homeownership rate. Below are a few highlights from the fourth week of February that influence our business:
Homeownership is Highest Since 2014. The Census Bureau reported on Thursday that the national homeownership rate rose slightly in the fourth quarter of 2018 to 64.8 percent, up from 64.4 percent in the third quarter and 64.2 percent in the fourth quarter of 2017. The Census Bureau said that change was not statistically different in either case, but at least it did continue the gradual upward trend in the rate since it hit an all-time low of 62.9 percent in the second quarter of 2016. The headline news, however, was a 1.2-point year-over-year change in the rate for those 34 to 44 years of age to 61.1 percent, by far the largest gain for any age group. The final three months of last year also yielded an additional 1.7 million units (compared to the end of 2017). This made 2018 the strongest year for owner household formation since 2004. We have now seen three years of growth in homeownership – with the last two well in excess of the one million mark – and believe that housing demand continues to be strong.
Pending Home Sales Jump 4.6% in January. Pending home sales rebounded strongly in January, according to the National Association of Realtors. All four major regions saw growth last month. The Pending Home Sales Index, a forward-looking indicator based on contract signings, increased 4.6 percent to 103.2 in January, up from 98.7 in December. Lawrence Yun, NAR chief economist, said “a change in Federal Reserve policy and the reopening of the government were very beneficial to the market. Homebuyers are now returning and taking advantage of lower interest rates, while a boost in inventory is also providing more choices for consumers.”
US Consumer Confidence Rebounds in February. American consumers were feeling more confident this month after a rally in the stock market and an end to the partial shutdown of the federal government. The Conference Board, a business research group, says its consumer confidence index rose to 131.4 from 121.7 in January. The index measures consumers’ assessment of current economic conditions and their expectations for the next six months. Consumers’ views of today’s economy were the sunniest since December 2000.