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After increasing in the third quarter for the first time in two years (from a 48-year low), American homeownership rose for a second consecutive quarter from 63.7 percent to 63.8, the Census Bureau announced Thursday. Fueled by job growth and flexible lending, these successive increases, albeit minuscule, are welcome news after a span of incessant downturns that began in 2013.
As their employment improves, renters are amassing the means to enter homeownership. December saw higher-than-projected existing home sales at 14.7 percent to a seasonally adjusted annual rate of 5.46 million, according to the National Association of Realtors (NAR). The median price of existing homes sold in December was $224,100, a 7.6 percent increase from a year ago marking 46 consecutive months of year-over-year boosts.
“While the carryover of November’s delayed transactions into December contributed greatly to the sharp increase, the overall pace taken together indicates sales these last two months maintained the healthy level of activity seen in most of 2015,” stated Lawrence Yun, NAR chief economist. “Additionally, the prospect of higher mortgage rates in coming months and warm November and December weather allowed more homes to close before the end of the year.”
The housing market is hoping that the role first-time buyers played in the last three months of 2015 is just a taste of what is to come. Of this fourth quarter rise, first-time buyers accounted for 32 percent of purchases, the highest since August, according to NAR. These new homeowners could be the key to raising a homeownership rate that peaked at 69.2 percent in June 2004.