The Harvard Joint Center for Housing Studies (JCHS) released growth projections of homeowner and renter households in a new report, Tenure Projections of Homeowner and Renter Households for 2018-2038. With uncertainty in the future of homeownership rates, JCHS projects that the U.S. will add between 2.1 million and 6.2 million renter households by 2028, and between 5.9 million and 10.3 million by 2038.
JCHS projected the growth in homeowner and renter households under three scenarios. The “base” scenario assumes homeownership rates remain constant at 2018 levels for each age, race/ethnicity, and family type group. Under this scenario, the homeownership rate would rise from 64.3% to 64.5% between 2018 and 2028, and then decrease to 64.1% by 2038. Changes in the homeownership rate would be the result of demographic changes. Household growth would include an additional 4.2 million renter households by 2028 and 8.1 million renter households by 2038.
The “high” scenario assumes homeownership rates will rebound to their 30-year average or current rate, whichever is higher, for each demographic subgroup. Under this scenario, the projected homeownership rate would increase to 65.9% in 2028 and decrease to 65.6% in 2038. Household growth would include an additional 2.1 million renter households by 2028 and 5.9 million renter households by 2038.
The “low” scenario assumes the recent homeownership uptick will reverse and the homeownership rate will fall proportional to the increases in the “high” scenario. Under this scenario, the homeownership rate would fall to 63% by 2028 and 62.6% by 2038. The number of renter households would increase by 6.2 million by 2028 and by 10.3 million by 2038.
The actual trajectory of homeownership rates and their impact on the number of renter households will depend on a number of factors, including households’ demand for housing, constraints on access to mortgage credit, and the supply of available homes for sale.
Tenure Projections of Homeowner and Renter Households for 2018-2038 is available at: https://bit.ly/2UbXGuF