U.S. homeownership rate plunges to 51-year low

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The last time the U.S. homeownership rate was this low, LBJ was president and The Beatles’ “Help!” was the nation’s No. 1 song.

Just 62.9 percent of Americans owned homes in the second quarter of 2016, matching a nadir last seen in 1965, the Department of Commerce said Thursday. The declining homeownership rate is a cloudy spot in an otherwise sunny housing picture: U.S. home prices hit another all-time high in June, and mortgage rates are near record lows.

Some were sanguine about the drop. Ralph McLaughlin, chief economist at Trulia, says the homeownership rate dropped mainly because millennials are finally moving out of their parents’ homes and forming households.

“If the decline is real, it is more likely due to a large increase in the number of renter households than any real decline in the number of homeowner households,” he said.

The homeownership rate for 18- to 34-year-olds fell to 34.1 percent in the second quarter.

 

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