As 2021 came to a close, homeownership and residential vacancy rate experienced slight improvements in the final months, according to recent reports from the U.S. Census Bureau.
The Census Bureau announced on Jan. 3 that the U.S. homeownership rate came in at 65.5% in the fourth quarter of 2021—up from the third quarter last year but down from 65.8% in Q4 2020.
National vacancy rates across the nation came in at 5.6% for rental housing and 0.9% for homeowner housing in the fourth quarter of 2021—down 0.9% and 0.1% year-over-year, respectively.
Key takeaways—Q4 2021
- Approximately 89.5% of the housing units in the United States in were occupied.
- The homeownership rate was highest in the Midwest at 70.1%,
- The median asking rent for vacant for-rent units was $1,207.
- The median asking sales price for vacant for-sale units was $239,000.
- Rental vacancy rates were lowest in the Northeast and West—4.3% and 4.0%.
- Homeowner vacancy rates were lowest in the West 0.7%
Expert analysis
“The nation’s 83.5 million owner-occupied households pushed the homeownership rate to 65.5% in the fourth quarter of 2021, up slightly from the third quarter and 0.3 percentage points lower than the same quarter in 2020 as the economy and housing markets continue to normalize in the wake of the pandemic.
The homeownership rate is strongly influenced by age. The oldest households, those aged-65 and over, have the nation’s highest homeownership rate (79.4%), while the youngest households, those under age 35, have the lowest rate (38.3%).
Homeownership rates rise sharply as young households age, with the rate among those aged 35 to 44 jumping to 61.4% in Q4 2021, just below the U.S. average. Given that the oldest millennials will turn 41 this year, and more than 45 million millennials are still at prime first-time homebuying ages, this demographic group is the major demand factor behind competitive housing market conditions. From both one year ago and the third quarter, homeownership rates were steady or higher for middle-aged households (those between 35 and 54). Meanwhile, the homeownership rate declined for both younger and older households.
In addition to age, we see persistent relationships between homeownership rates for different racial and ethnic groups. From both the third quarter and one year ago, the homeownership rate for Black households declined and remained the lowest among the racial and ethnic groups tracked. Hispanic households saw changes that were not statistically significant, while Asian, Native Hawaiian, and Pacific Islander households saw gains in the homeownership rate in both the quarter and the last year. The homeownership rate gap is one reflection of the challenges many Americans face in getting access to housing and related services.
Despite recent new construction gains, the housing supply shortage persists, as reflected in record-low vacancy rates for the fourth quarter across both owned and rented homes. The rental vacancy rate hit a 38-year low, while the homeowner vacancy rate remained at the lowest level in the data’s 66-year history. With limited vacancy among both owned and rented homes, Q4 Census data showed rising housing costs across the board, consistent with asking price trends for for-sale homes and rentals that we’ve seen in realtor.com® real estate data.” — Danielle Hale, Realtor.com Chief Economist
Jordan Grice is RISMedia’s associate online editor. Email him your real estate news to jgrice@rismedia.com.
