U.S. Homeownership Rate Falls to Four-Decade Low

After nearly a decade of solid gains, the U.S. homeownership rate is down to one of its lowest levels in four decades, a clear indicator that a burgeoning affordability crisis is discouraging a growing number of prospective buyers nationwide. In the first quarter of 2022, the homeownership rate plunged to 65.4% from a recent peak of 68%, MarketWatch reports. The lowest homeownership rate recorded was in 2016, when 62.9% of Americans owned homes, and that level was consistent with the lows of the mid-1960s.

Not only are rising mortgage rates pricing would-be buyers out of home purchases, but institutional landlords backed by funding from Wall Street are also buying up what few affordable homes remain in marginalized neighborhoods, and the average buyer is unable to keep up.

A key caveat of the current housing market has been the rise of institutional landlords in single-family rentals since the foreclosure crisis more than a decade ago, a subject of recent discussions on Capitol Hill.

Wall Street has been providing institutional landlords with low-cost, nonrecourse funding to buy up homes as rentals in recent years. The U.S. housing market also has dramatically changed in the past 40 years for families, with the rise of the roughly $8.4 trillion mortgage-backed securities market becoming a key avenue of housing finance for borrowers.

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