Dive Brief:

• The U.S. homeownership rate held steady in the first quarter of 2017 at 63.6%, compared to 63.7% in the fourth quarter of 2016, according to the National Association of Home Builders' analysis of the Census Bureau’s latest Housing Vacancy Survey.

• Homeownership levels for households under the age of 55 increased slightly year-over-year, with millennial and Generation X rates each rising by 0.1%. The rate for households between 45- and 54 years old increased by 0.2%. 

• Overall, the national homeownership rate is down 5.6 percentage points from its peak in 2004 and is below the 27-year average of 66.1%. The national vacancy rate stayed flat from Q4 2016 at 7% in Q1 2017.

Dive Insight:

The U.S. homeownership rate is on the upswing, if only slightly, after hitting a half-century low in Q2 2016. Still, the rate isn’t expected to grow quickly as low for-sale inventory levels mean plenty of demand is being left unmet. Material price growth, climbing mortgage rates and the persisting lot and labor shortage are among the factors setting the pace of new residential construction activity

April's three-point drop in the NAHB/Wells Fargo Housing Market Index from its post-recession high of 71 in March is one indicator that those factors are having an impact. March saw a dip in housing starts, with figures coming in below analyst predictions. Still, the month had the most single-family homes under construction since September 2008. That, along with a hike in building permit authorizations for the month, will likely bode well for continued activity in single-family residential construction.

A rise in new- and existing-home sales for the month also points to activity in the market, with new-home sales posting a 5.8% increase in March and existing-home sales climbing 4.4% for the month. Pending home sales, however, dipped modestly from February, due mostly to low inventory levels, particularly in the entry-level category.