• The Q3 2018 U.S. homeownership rate was 64.4 percent, up modestly from 64.3 percent in Q2 2018 and 63.9 percent in Q3 2017, according to the U.S. Census Bureau.
• The overall trend is driven by the under-35 age bracket. The homeownership rate among those under the age of 35 jumped to 36.8 percent, the highest level since the end of 2013 and up strongly from 35.6 percent a year ago.
• The 45 to 55 age bracket homeownership rate declined 0.9 percentage points to 69.7 percent, reversing much of the gains over the past year.
• The national rental vacancy rate edged lower, to 7.1 percent from 6.8 percent in Q2, commensurate with the first national rent declines in many years, according to Zillow’s Rent Index.

Led by another surge in owner household formation, homeownership rates are up again, but those gains are not driven by those who experienced the housing crash and lived to tell about it.

At 64.4 percent homeownership nationally, we still fall short of the 67.1 percent seen at the beginning of 2000, but the continued, if gradual, rise in homeownership rates is a more solid, trustworthy sign of housing market recovery than home values, which have more years of volatility in front of them.

First-time home buyers drove the market this year. The homeownership rate of the 45 to 55 age bracket dropped quarter-over-quarter, while the under 35 age bracket continues to rally. Their homeownership rate is up a whopping 1.2 percent since Q3 2017 to 36.8. Each year, for the next several years, more people will be turning 34 — the median age of first-time home buyers — than the year before. And they’re turning to home buying: 46 percent of buyers this past year were first timers.

With a quarter-over-quarter decline in homeownership rate, the age group hit hardest by the housing crash — the 45 to 55 age bracket — experienced only moderate growth over the past year, rising just 0.6 percentage points to 69.7 percent.

The drive to buy is leaving the rental market a bit high and dry. Over the past quarter, renter household formation is down 68,000 households, and rental vacancy rates edged higher to 7.1 percent. This September saw the first rent declines, -0.2 percent year-over-year, after several months of softening.