U.S. rental vacancy rate dropped to its lowest level since 1984 as homeownership soar in the second quarter. However, these figures may not be telling the whole story.
U.S. rental vacancy rate
The rental vacancy rate in the U.S. went down to 5.7 percent in Q2 2020. It was at 6.6 percent in the first quarter. That is the lowest recorded since 1984, according to the latest U.S. Department of Commerce report.
The homeowner vacancy rate in Q2 2020 was 0.9; that is a 0.40 points drop from the same period last year. The vacancy rate for homeowner housing is also 0.20 percentage points lower than the Q1 2020 level.
Housing units in the second quarter of 2020 is about 90.1 percent occupied. Owner-occupied units comprised 61.2 percent of all housing units in the U.S. Renter-occupied housing units, on the other hand, made up 29.0 percent of total housing units.
U.S. homeownership rate
Meanwhile, homeownership recorded its highest level since Q3 2008. In Q2 2020, the U.S. homeownership rate was 67.9 percent. That is up from 65.3 percent in the first quarter of 2020. In 2019, the homeownership rate was 64.1 percent.
Homeownership rate saw the most increase in percentage basis among the under-35-years-old age group. That recorded increase in the second quarter was 40.6 percent. In Q1 2020, homeownership was at 37.3 percent.
In April and May, home sales activity suffered a decline due to the health crisis that gripped the nation. However, sales of new homes and existing homes rebounded in June, MarketWatch noted.
The rise in homeownership is attributed to the record-low mortgage rates that boosted homebuilding activity. Also, the pandemic-induced job losses affected the workers in the service sector who are more likely to be renter than home buyers. That meant the pandemic did not make a heavy financial impact on most home buyers.
Mortgage companies also received a rise in the number of requests for payment relief. There have been about 4.3 million homeowners that sought forbearance in mid-June. That figure has fallen since then. Forbearance plans allowed homeowners to pause their mortgage payments for up to one year. That helped prevent many homeowners from becoming delinquent on their mortgages despite the rise in unemployment.
The homeownership rates in all regions were up in the second quarter compared to Q1 2020 figures. The Midwest recorded a 71.4 percent homeownership rate. The South region homeownership rate was 71.1 percent. These two regions recorded higher rates than the Northeast(63.3 percent) and West regions(62.6 percent).
However, the U.S. Census Bureau noted that issues with data collected might have affected the accuracy of these measurements. There were adjustments made on how interviews were conducted due to the pandemic. In-person interviews were suspended on March 20, 2020. That suspension continued through June. It was also noted that the response rate for the recent survey was 12 percentage points lower.
Still, industry experts say that increases in the figures cannot be solely blamed on the error in measurement. Other studies suggest that home buying desire remains strong.
