We have talked a lot about the dismal post-housing crash stats on homeownership. They hit the lowest level in Census Bureau history in the second quarter of this year, 63.1%. Well, surprise. They didn’t get any better in the third quarter. While the overall rate did rise to 63.4% on a seasonally adjusted basis, the Bureau considers that change as statistically meaningless once the margin of error is factored in.
For those on the hunt for the rare and endangered Millennial homeowner there was a smidgen of hope in the report. The rate for those under age 35 ticked up from 34.1% to 35.2% but a larger margin of error made that a statistical wash as well. Still, it was a larger increase than occurred in any of the other age groups except the very oldest.
In related news, a report from Yardini Research said about 1.1 million new households formed during the third quarter, a big improvement on the second quarter which saw only 944,000. Better yet, about 560,000 of them were owner rather than renter households.
As expected the Federal Reserve’s Open Market Committee (FOMC) did not raise rates at their November 1-2 meeting. It was always thought unlikely the Feds would do so six days before a national election.
In their post-meeting statement, the Fed said it was awaiting “some further evidence” of progress in the economy but also said they saw signs of an increasing inflation rate, one of their long-stated requirements for an increase.
Now all eyes turn to the December meeting. Forecasters came into 2016 expecting the Fed would raise rates four times this year; next month is their last chance to do it even once.
The first of the September price indices came out this week and there seems to be no slowing of appreciation. CoreLogic’s Home Price Index rose 1.1% month-over-month for the fourth consecutive time. The company pegged the annual increase at 6.3%, up from 6.2% in August.
But some homeowners aren’t getting their share of the price hikes. Real estate firm Redfin reports that the prices of luxury homes–the top 5% most expensive homes sold in the city in each quarter–rose only 1.4% from the third quarter of 2015 to the same period in 2016.
The company says that for seven consecutive quarters the sales of these luxury homes have lagged the market. However the sales of $1 million plus homes are brisk with a 6.8% year-over-year gain. Must be because they are still affordable.
Stay tuned next week for the upcoming jobs reports.