The U.S. homeownership rate in 2022 was even higher than before the COVID-19 pandemic — 65.8% compared to 64.6% in 2019. The rebound was driven largely by people 44 and younger, according to an annual survey by the U.S. Census Bureau.
Homeownership continued to climb after the downturn following the foreclosure crisis of 2004 and the Great Recession (2008), when rates dipped as low as 63.4% in 2016.
The recovery began before the pandemic hit the U.S. in March 2020: home ownership rates rose 1.2 points from 2016 to 2019 and by another 1.2 points from 2019 to 2022.
(The pandemic disrupted data collection in 2020 and part of 2021; as a result, it is difficult to know whether the homeownership rate grew during each year of the pandemic.) Younger households are typically more likely to rent than own homes. However, from 2016 to 2022, homeownership among adults under age 55 went up and remained stable among older populations.
From 2016 to 2019, homeownership increased among householders under age 35 (up 2.2% points), ages 35 to 44 (up 1.5 points), and 45 to 54 (up 0.8 points).
Homeownership rates rose in the Northeast, South and West from 2016 to 2019, and in all regions from 2019 to 2022. Low mortgage rates likely helped drive the rise, even after rates began to go up in 2022.
Why does any of this matter for the wood pallet sector? Well, as goes the housing market, so goes the forest products sector. Home construction is one of the largest users of wood in the country, and it has a big impact on the overall health of the sawmill and logging sectors. Younger Americans switching from renting to buying is a good thing for the long-term health of the home construction market. Even with very high interest rates this year, prices have remained fairly high although home prices have dropped in some cities. High interest rates are also keeping many existing homeowners from listing their homes because they would lose too much buying power.
The Apollo Group recently estimated that about 61% of all outstanding U.S. home mortgages have an interest rate below 4%, including 23% that are below 3%. This means that most new housing demand will be satisfied by new construction. That’s good news for the wood sector and pallet producers. The question is, “Who can afford it with sky high construction prices?”
