US Homeownership Drops: These 3 Tips Could Help You Buy A Home
The homeownership rate in the United States dropped to 65.4% in the third quarter of 2021, down significantly compared to 67.4% in Q3 2020, according to the latest data released by the U.S. Census Bureau. This rate held steady from 65.4% in the second quarter, matching that quarter’s lowest rate since Q1 2020, just before the onset of the global coronavirus pandemic.
Homeownership in the U.S. reached its peak in 2004, hitting its highest rate of 69.2%! The nationwide drop in Q3 2021 compared to the year prior appears to be driven largely by declining homeownership rates in the southern and western regions of the country, down to 67% and 59.9%. However, homeownership rates of 70.9% in the Midwest and 61.7% in the Northeast were not statistically different from the year before.
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How you can afford to buy a home?
Affording a home in today’s competitive housing market can be a challenge. However, prospective homebuyers can take these 3 steps to position themselves for success before purchasing a home in the near future.
1. Buying when rates are low
2. Working to improve your credit score
3. Searching for the best lender
Buy when rates are low
When interest rates are low, homebuyers can save significantly on their monthly payment and over the life of the loan. This either allows them to buy a home while making lower monthly payments or allows them to afford a more expensive home, investing the money in real estate rather than spending it on higher interest rates. Currently, the 30-year mortgage holds an average interest rate that is just above 30%. This is near record lows, but rates are expected to rise in the months and years ahead.
Work on your credit score
During the months leading up to purchasing a home, it’s important for homebuyers to have their finances in order. This includes checking their credit scores and improving their credit history. Reaching out to a mortgage advisor to ask about the next steps to get ready to purchase a home is a great start to making sure your finances/credit can get you into the home of your dreams!
Find the right mortgage lender for you
When homebuyers enter the housing market, they may have different needs for their mortgage experience. Buyers should always compare multiple mortgage advisors to see which one they work with best and offers them the most support. Lucky for you, Snapfi has multiple different advisors that can guide you through this process!
What generation has the highest rate of homeownership?
Older adults – ages 65 and above – saw the highest homeownership rate in Q3, at 79.7%, according to the Census Bureau. Younger generations of Americans, though, had much lower homeownership rates.
People between the ages of 55 and 64 saw a homeownership rate of 73.7%; 45- to 54-year-olds were at 70.1% and those about a decade younger (ages 35-44) saw a rate of 61.3%. The lowest homeownership rate was found among the youngest-age households, at 38.5% for those under the age of 35.
A recent study showed that millennials, or those currently between the ages of 25 to 41, are the largest population of homebuyers. However, those young adults are seeing their homeownership dreams being delayed by student debt, according to the University of Chicago Press Journals.
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