Home prices have been the bane of the real estate news cycle for a while now, bringing a damper on the home buying market. However, recent data shows that home prices really might not have kept buyers out as much as was thought.
A new report from LendingTree found that from 2012 to 2022 homeownership rates have increased 108 basis points in the nation’s 50 largest metros. To get more specific from 2019 to 2022 alone homeownership rates increased by 93 basis points.
As of 2022, LendingTree’s report found that almost 43.5 million of the 70.4 million occupied housing units in the nation’s 50 largest metros were owner-occupied. The overall homeownership rate across these metros is 61.72%.
Key highlights:
- Homeownership rates are highest in the Detroit, Minneapolis and Pittsburgh metros. The homeownership rates in these metros are 71.49%, 70.54% and 70.45%, respectively.
- Homeownership rates are lowest in the Los Angeles, New York, and San Diego metros. At 47.94%, Los Angeles is the only metro among the 50 largest where the homeownership rate is lower than 50.00%. In New York and San Diego, homeownership rates are higher—albeit still relatively low—at 51.72% and 54.53%.
- From 2019 to 2022, the homeownership rate across the nation’s 50 largest metros increased by 93 basis points from 60.79% to 61.72%. This represents an increase of 3,175,130 owner-occupied housing units.
- From 2012 to 2022, the homeownership rate rose by 108 basis points from 60.64% to 61.72%. That’s an increase of 6,155,379 owner-occupied housing units.
- Homeownership rates increased the most in Las Vegas, Virginia Beach and New Orleans from 2019 to 2022. Across these three metros, homeownership rates increased by an average of 305 basis points.
- Conversely, homeownership rates decreased by an average of 57 basis points in Nashville, Salt Lake City and San Jose
- From 2012 to 2022, homeownership rates increased the most in Las Vegas, New Orleans, and Phoenix. On average, homeownership rates in these metros increased by 524 basis points from 2012 to 2022.
- Over that same period, homeownership rates increased in 37 of the nation’s other 50 largest metros, remained the same in one, and declined in nine. Homeownership rates decreased the most in Miami, San Jose and Memphis, falling by an average of 167 basis points.
- Homeownership rates have increased despite rising home prices. From 2012 to 2022, median home values across the nation’s 50 largest metros increased from 25.39% to 197.73%. The average increase across these metros was 97.38%. Despite this, homeownership rates still rose (barring a handful of exceptions).
Major takeaway:
“As our study shows, homeownership rates have increased in the majority of the nation’s largest metros relative to 2019 and 2012. This is despite the fact that home values in these metros are rising considerably,” commented Jacob Channel, LendingTree’s senior economist and author of the report.
Channel continued, “While these higher homeownership rates indicate opportunities for people to purchase property even when home values are rising, it doesn’t mean homebuying is without challenges, or that it’s going to be an achievable goal for everyone. On the contrary, a combination of steep home prices and persistently high mortgage rates have made buying difficult for many in recent years. This is evidenced by the fact that, since the start of 2023, mortgage demand has stayed at or near its lowest levels in decades.”
“That said, there are nonetheless millions of homeowners in the U.S., and people are still purchasing new homes. Even groups who typically have less money at their disposal, like millennials and first-time homebuyers, are receiving mortgage offers,” concluded Channel. “While today’s housing market isn’t necessarily easy to navigate, that doesn’t mean homeownership is a vanishing concept or that the U.S. is poised to become a nation of primarily renters anytime soon.”
For the full report, click here.
