Given how much attitudes towards owning a home changed last year, it’s probably not a surprise that homeownership hit a 12-year high in the third quarter of 2020.
What may come as a surprise, however, is the fact that homeownership appears to have fallen back in the fourth quarter by a decent amount, all but erasing the gains made in the second and third quarter.
Considering just how hot the housing market was last year, it seems unlikely that homeownership would have fallen in the fourth quarter. Especially since home sales in 2020 were well above what they were in 2019. So, what gives?
Well, it looks like the pandemic may have caused the Census Bureau to report a potentially inaccurate figure.
According to the latest Census Bureau report, the national homeownership rate was 65.8% in the fourth quarter, falling below the third quarter’s total of 67.4%, which was the highest that figure had been since the second quarter of 2008.
So, how did homeownership fall when so many people were buying homes?
According to the Census, the pandemic led to changes in how it collects homeownership data. Under non-pandemic circumstances, the Census conducts in-person interviews as part of its research to determine the national homeownership rate.
Those in-person interviews were either suspended or scaled back over the course of the year, meaning the method to gather the data was not the same in 2020 as it was in previous years.
As a result, the Census notes that it is “unable to determine the extent to which this data collection change affected our estimates.”
The bottom line? It’s possible that the homeownership rate could be different from the one published by the Census, but no one really knows for sure.
“All things considered, the (homeownership) data collection issues make comparing the last three quarter estimates to previous quarters challenging,” a National Association of Homebuilders analyst wrote of the latest Census report. “Furthermore, it is impossible to tell whether the changes in homeownership rates, vacancy rates and changes in housing inventory components are due to the effects of the COVID-19 pandemic or the effects of data collection issues.”
Taken at face value, the homeownership rate fell in the fourth quarter, but was still 0.7% above the fourth quarter of 2019.
Broken down by regions, the decline from the third quarter to the fourth was most felt in the South and West regions of the U.S. In the South, homeownership fell from 70.8% in the third quarter to 67.7% in the fourth quarter. In the West, homeownership fell from 62.1% to 60.4% in that same time period.
Despite those reported declines, home sales were still up last year over the year before. As for when that will be reflected in the homeownership data, it’s anyone’s guess.