The rate of U.S. homeownership seems to be flattening after years of decline, according to a study released by the Joint Center for Housing Studies of Harvard University. The study, released on Friday, found the rate was 63.6% in the first quarter of 2017, essentially flat from two years ago. The homeownership rate had been falling for the 12 previous years.
The study comes amid signs of rising demand supported by wage growth, according to a report from Reuters. “Early indications in 2017 suggest that the upturn is continuing,” researchers wrote.
Housing costs, however, remain a heavy burden for many Americans.
About one-third of U.S. households spent more than 30% of their gross income on housing, as of 2015, the study found. The study found that 38.9 million households were considered “cost-burdened,” meaning they spent more than 30% of their income on housing, as of 2015. That number was down from 39.8 million cost-burdened households the year before. (View the interactive map.) It was the fifth year of decline.
About 16% of households were considered “severely” burdened, meaning they spent more than have their income on housing.
The study found wide disparities across geographic areas as well. Markets along the East and West Coasts have seen prices grow by more than 40% since 2000, while house prices in the South and Midwest have fallen.
“If you go back to, say, 1970 and you look at the differences in house prices across market areas, they were not nearly as extreme as they are now. It’s a function of income inequality and how much the differences in income have grown,” said Chris Herbert, managing director of the center.
U.S. house prices rose 5.6% in 2016, according to the Harvard study, “finally” surpassing the high reached nearly a decade earlier.
“Achieving this milestone reduced the number of homeowners underwater on their mortgages to 3.2 million by year’s end, a remarkable drop from the 12.1 million peak in 2011,” according to the authors. “In inflation-adjusted terms, however, national home prices remained nearly 15% below their previous high.”
“A decade after the onset of the Great Recession, the national housing market is finally returning to normal, with incomes rising and household growth strengthening,” researchers wrote. “But not all households and not all markets are thriving, and affordability pressures remain near record levels.”