Rapid Reaction: Q1 2017 Homeownership Rate

• The Q1 2017 homeownership rate ticked down to 63.6 percent from 63.7 percent at the end of 2016, a statistically insignificant dip largely driven by a small drop in the number of owner households and small increases in the number of renter households.
• The black homeownership rate rose to 42.7 percent from 41.7 percent in Q4 2016 and 41.5 percent a year ago. The Hispanic homeownership rate also rose slightly, though remains well below 50 percent (46.6). Whites (71.8 percent) and Asians (56.8 percent) continue to have the highest homeownership rates.
• The national rental vacancy rate rose slightly to 7 percent from 6.9 percent in Q4 2016, driven by increased rental vacancies in suburban and rural areas.

Today's homeownership report is fairly underwhelming, with most key indicators largely remaining flat or changing only modestly. But there are a few bright spots under the hood. Hispanic and black homeownership rates both rose, even as they still remain far below white and Asian rates. The black homeownership rate showed particular strength, rising 1 full percentage point from Q4 2016 to 42.7 percent, breaking the 42 percent threshold for the first time since Q3 2015. Urban renting continues to remain popular -- the national rental vacancy rate rose very slightly, driven by more rental vacancies in suburban and rural areas. The homeownership highs of close to 70 percent reached in the early 2000s still remain far off, and realistically the market may never get back to those levels. But far from being a bad thing, a more balanced housing landscape between owners and renters is largely positive. The market is finding a natural equilibrium, and that will take some time, even several years after the worst of the recession.