By Manuel Gutierrez, Consulting Economist to NKBA
The homeownership rate — the percentage of U.S. households who own their home — was 65.9 percent in Q4 2022, virtually unchanged from Q3 2022. However, it is 0.4 percentage points higher than in Q4 2021, reflecting the continuation of a positive trend that will be beneficial to those in the K&B industry.
- The homeownership rate has been slowly recovering after its sharp decline between 2004 and 2016, when the rate fell from the historical high of 69.4 percent in Q2 2004 down to 63.1 percent in Q2 2016. The rate in Q4 2022 was almost three percentage points higher than it was in Q2 2016. This is good news, since a rising and higher homeownership rate implies that households moved from one home into another, which means they can be expected to spend more on remodeling in the future.
- The homeownership rate increases with age: older households have higher rates that reflect their wealth accumulated over time. In Q4 2022, 79 percent of households 65 years and over owned the home they lived in, a large difference from the 38.7 percent of under 35 years households. In between, the 35 to 44 years households had a 62.2 percent rate, the 45 to 54 years households had a 70.6 percent rate and the 55 to 64 years households had a 75.7 percent rate.
- Year over year, the fourth quarter homeownership rate rose for all age groups — except for the oldest age group’s rate, which fell by 0.4 percentage points. The 35 to 44 years group saw the biggest gain, with an increase of 0.8 points, followed by the 45 to 54 years group, whose rate rose by 0.6 points. The other two groups each had increases of about 0.4 points.
- Among racial and ethnic groups, fewer than half of Black and Hispanic households were homeowners. For Black households, the homeownership rate was 44.9 percent, up 1.8 percentage points from the prior year — higher than the overall increase of 0.4 points seen across all race and ethnicity groups. However, the rate for Black households was still 4.5 points lower than its highest rate back in 2004.
- Hispanic households’ rate was 48.5 percent — slightly higher than the year before, with a negligible increase of 0.1 percentage points. This rate is just 2.9 percentage points lower than its maximum of 50.9 percent reached in 2020.
- Homeownership data for Asian, Native Hawaiian and Pacific Islander households has been available only since 2016, so data on their homeownership during the 2000s housing bubble and Great Recession is not available. Based on the data available, their ownership steadily increased over the last seven years, with 61.9 percent of Asian, Native Hawaiian and Pacific Islander households owning their homes in Q4 2022.
