Dive Brief:

• The national homeownership rate rose slightly from its lowest level in half a century in the second quarter of 2016 to 63.5% in the third quarter, but it is still behind the 63.7% rate a year ago, according to data released Thursday by the U.S. Census Bureau.

• There were more than 1.1 million household formations in the third quarter, up from 944,000 in the second quarter and with more than half (561,000) of them owners.

• Individuals under the age of 35 accounted for 35.2% of homeowners during the third quarter, on par with a year ago but up slightly from the first (34.2%) and second (34.1%) quarters of 2016.

Dive Insight:

Following a 51-year low in the second quarter of 2016, the U.S. homeownership rate is on the rise — but only slightly. Of the 1.1 million households formed (occupied) during the period, 55.5% were owners versus 31.9% that were renters. Creating more homeowners than renters is key to recovery in the housing market and, ultimately, raising the homeownership rate, which peaked at 69.1% in 2005.

Other reports this week indicate that the tide may be shifting, albeit slowly, to homeownership for more people. Pending home sales — for which a contract is signed but the deal hasn’t closed — were up 1.5% from August to September, better than analysts had anticipated, and 2.4% from September 2015. Sales of previously owned homes also rose in September, up 3.2% from August and 0.6% from a year ago, on the strength of first-time buyers, which took their largest share of sales in more than four years.

A cooling in multifamily activity pulled housing starts down 9% to an annual rate of 1.047 million in September while single-family was up 8.1% for the month and 5.4% from a year ago, indicating ongoing demand for new construction. Building permits, which offer a gauge of the pipeline for future construction activity, were up 6.3% from August and 8.5% from September 2015 to 1.225 million last month.

Meanwhile, supply-side headwinds including tight existing inventory, slow gains in new construction activity and a shortage of skilled labor are pushing up home prices nationwide. Home prices were up 5.1% in August from a year earlier and are 0.1% off their peak in July 2006, according to the S&P Core Logic Case-Shiller U.S. National Home Price Index.