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Remember when O.J. Simpson fled police in his white Ford Bronco? Or, when figure skater Nancy Kerrigan was clubbed in the knee in the “whack heard round the world?” Or when Major League Baseball was cancelled for a season because of a strike?
If you go by home vacancy data released today by the Census Bureau, we’re all the way back to 1994 when those events happened. The rate of vacant homes dropped to 1.4%, the lowest level in almost a quarter of a century. The rate measures privately owned homes standing vacant, typically because they’re for sale or because new owners haven’t moved in yet. In 2008, during the foreclosure crisis, it reached a record 2.9%.
Other than the notable low in the vacancy rate, the dryly titled “Residential Vacancies and Homeownership Report” had little new information for the home-sale market. The homeownership rate was 64.2%, matching the year-ago quarter and not far from the 64.8% in 2018’s final three months.
For Americans under age 35, the homeownership rate was 35.4%, not far off the 35.3% from a year earlier. The share for the 35-to-44 age group was 60.3%, up from 59.8%. For 45- to 54-year-old Americans, it was 69.5%, down from 70%, and for people over 65 years old, it was 78.5%, matching a year ago.
There were 77.5 million homes occupied by owners in the first quarter and 43.3 million lived in by renters. Those number didn’t budge much.
Lower mortgage rates will help to support the housing market this year, which will keep vacancy rates low, economists say. The 30-year fixed-rate mortgage averaged 4.2% this week, compared with 4.58% a year ago, according to Freddie Mac. While the rate was slightly higher than last week – rising from 4.17% — it’s low enough to prod housing demand, Sam Khater, Freddie Mac’s chief economist, said in a statement today.
“Despite the recent rise in mortgage rates, both existing and new home sales continue to show strength – indicating the lagged effect of lower rates on housing demand,” he said. “This, along with improved affordability, should push housing activity higher in the coming months.”