U.S. homeownership rates and trends (Q1 2016)

National homeownership rates remain near all-time lowsResidential vacancies and homeownership Q1 2016

1.

2.

3.

Homeownership slides down to 63.5 percent in the first quarter• This figure is 30 bps lower quarter-on-quarter; 20 bps lower year-on-year• Homeownership rates rose in the Midwest 30 basis points year-on-year, while

falling in all other regions, led by a 70 basis point decline in the Northeast

Homeownership rates moderate compared to house value increases• Existing home sales rebound to 2007 levels; still pale previous cycle• Consistent homeownership decline has paralleled appreciation of home

prices, up in excess of 5.0 percent for eight consecutive quarters

Recent homeownership gains by generation X a drop in the bucket• Generation X homeownership increases 50 basis points since the beginning

of 2015; the second straight quarter of yearly gains• In spite of modest recent gains, the generation X homeownership rate is down

14.5 percent over the course of a decade

The U.S. homeownership rate fell to its lowest rate since the fourth quarter of 1967

Source: JLL Research, U.S. Census Bureau, U.S. Bureau of Labor Statistics

2

The homeownership rate was recorded at 63.5 percent in the first quarter, declining 20 basis points from first quarter 2015

3

Source: JLL Research, U.S. Census Bureau

63.5%

59.0%

60.0%

61.0%

62.0%

63.0%

64.0%

65.0%

66.0%

67.0%

68.0%

69.0%

70.0%

Home

owne

rship

(%)

4

… yet the national rate hinged on annual declines of 70 basis points in the Northeast, 30 basis points in the South


55.0%

60.0%

65.0%

70.0%

75.0%

80.0%

Home

owne

rship

(%)

U.S. Northeast Midwest South West

Homeownership rates inch higher, gaining 30 basis points, in the Midwest year-over-year

5


Percent Change, 2006 - 2016

-7.7%U.S.

-9.8%Cities

-6.9%Suburbs

68.8% 66.4%63.5%

54.0% 51.4% 48.7%

76.3% 73.8% 71.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Q1 2006 Q1 2011 Q1 2016

U.S. Cities Suburbs

Homeownership in cities has spent eight consecutive quarters below 50.0 percent

Homeownership rates decline 5.3 percent respectively throughout cities and suburbs over a decade

6

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%55.0%60.0%65.0%70.0%75.0%

Home

owne

rship

rates

by m

etrop

olitan

area


U.S. homeownership: 63.5%

Western markets have seven of the lowest ten rates, each trailing the national average by over 5.0 percent

Homeownership lags in the major metros of the Western region

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Jan-

99Ju

l-99

Jan-

00Ju

l-00

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

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l-10

Jan-

11Ju

l-11

Jan-

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l-12

Jan-

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l-13

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l-14

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l-15

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16

Exist

ing ho

me sa

les, s

easo

nally

adjus

ted

7

Source: JLL Research, National Association of Realtors

Existing home sales in April were 5.45 million units, gaining 6.0 percent year-over-year; 1.7 percent from March

The inventory of unsold houses rose 9.2 percent in April

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000Ma

y-10

Jul-1

0Se

p-10

Nov-1

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n-11

Mar-1

1Ma

y-11

Jul-1

1Se

p-11

Nov-1

1Ja

n-12

Mar-1

2Ma

y-12

Jul-1

2Se

p-12

Nov-1

2Ja

n-13

Mar-1

3Ma

y-13

Jul-1

3Se

p-13

Nov-1

3Ja

n-14

Mar-1

4Ma

y-14

Jul-1

4Se

p-14

Nov-1

4Ja

n-15

Mar-1

5Ma

y-15

Jul-1

5Se

p-15

Nov-1

5Ja

n-16

Mar-1

6

Exist

ing H

ome S

ales:

Hous

ing In

vento

ry

8

The supply has declined 3.6 percent from year-over-year, down 64.5 percent from August 2010


It would take 4.7 months to sell current home stock at April’s pace, tightening 9.6 percent from April 2015’s pace

0

2

4

6

8

10

12

14

May-1

0Ju

l-10

Sep-

10No

v-10

Jan-

11Ma

r-11

May-1

1Ju

l-11

Sep-

11No

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r-12

May-1

2Ju

l-12

Sep-

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v-12

Jan-

13Ma

r-13

May-1

3Ju

l-13

Sep-

13No

v-13

Jan-

14Ma

r-14

May-1

4Ju

l-14

Sep-

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v-14

Jan-

15Ma

r-15

May-1

5Ju

l-15

Sep-

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v-15

Jan-

16Ma

r-16

Exist

ing H

ome S

ales:

Month

s Sup

ply

market equilibrium – 6 months supply

9


-8.0%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

Year

ly pe

rcent

chan

ge

Homeownership House Price Index

10

Source: JLL Research, U.S. Census Bureau, Federal Housing Finance Agency

Consistent homeownership decline has paralleled appreciation of home prices, up in excess of 5.0 percent for nine consecutive quarters

Home price gains exhibiting strong, consistent momentum

11

12.3%

10.8%9.9%

8.5% 8.4%7.6%

6.4% 6.4% 6.2% 6.1% 6.0% 5.6% 5.4%

4.3% 4.3%3.7%

2.7%1.7% 1.4%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

Aver

age a

nnua

l hou

sing p

rice i

ndex

grow

th, la

st 12

mon

ths

Source: JLL Research, McGraw Hill Financial

A strengthening housing market has the potential to make homes less affordable for renters

Pricing growth maintains a brisk pace nationally–5.4 percent, led by Portland, Seattle and Denver

Homeownership continues long-term decline across age cohorts

-7.3%

-19.1%

-14.5%

-8.7%-6.8%

-1.9%-0.3%

-1.2%

0.9%

-1.3%-0.1% -0.3%-0.5%

-1.5% -0.7% -1.3%

0.7%

-0.6%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

U.S. Under 35 years 35 to 44 years 45 to 54 years 55 to 64 years 65 years and older

Perce

nt ch

ange

in ho

meow

nersh

ip ra

tes (%

)

10-year % ch. 1-year % ch. 1-quarter % ch.

12

Pronounced declines of 7.3 percent nationally over a decade, as well as throughout age cohorts –notably from the millennial and gen x segments


Gen X has seen consecutive quarters of year-on-year gains in homeownership rate, the only age cohort to see positive returns

13

-350

-300

-250

-200

-150

-100

-50

0

50

100

150

200

Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016

Home

owne

rship

rate

annu

al ch

ange

(bps

)

U.S. Under 35 years 35 to 44 years 45 to 54 years

70.1%(Q1 2005)

58.9%(Q1 2016)


Only 69.2 percent of those aged 45 to 54 currently own a home

76.5%

74.8%

69.2%

81.8%

79.1%

75.7%

62.0%

64.0%

66.0%

68.0%

70.0%

72.0%

74.0%

76.0%

78.0%

80.0%

82.0%

84.0%

Q1 2005 Q1 2010 Q1 2016

Home

owne

rship

(%)

45 to 54 years 55 to 64 years

14

This figure has declined from a high of 77.4 percent in the second half of 2004; those aged 55 to 64 have experienced similar decline over the same time frame

-7.5%55 to 64 years

-9.5%45 to 54 years



… while millennials maintain a lagging rate of 34.2 percent

64.2%67.1% 69.1% 67.1%

63.5%

37.7%40.5%

43.3%38.9%

34.2%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Q1 1995 Q1 2000 Q1 2005 Q1 2010 Q1 2016

Home

owne

rship

(%)

US Under 35 years

15

Endemic debt and lagging wages are two reasons keeping millennials out of homeownership, driving a 26.6 percent decline since 2005

-8.8%U.S.

-26.6%Under-35 years



0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Hous

ehold

s (%

)

Total

hous

ehold

s, on

e per

son

Total households, one person Percent of households

16


27.7 percent of households were one person in 2014, an all time highOne person households continue their steady rise

17

68,75273,258 75,467 74,504 74,656

33,522 33,47935,859

39,46942,852

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q2 2000 Q1 2004 Q1 2008 Q1 2012 Q1 2016

Thou

sand

s

Owner-occupied Renter-occupied

8.6%Owner-occupied

27.8%Renter-occupied



Demand for rentals continues to demonstrate outsized growth in comparison to modest economic growth and sustained increases in home price values

Renter-occupied units have increased 27.8 percent since 2000

18


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

Rente

r-occ

upied

hous

ehold

s (tho

usan

ds)

Home

owne

rship

(%)

Renter-occupied households Homeownership Under-35 homeownership

43.3%(Q1 2005)

34.2%(Q1 2016)

This increase parallels the decrease in under-35 homeownership in the same time periodRenter-occupied households increased 28.8 percent since 2005

COPYRIGHT © JONES LANG LASALLE IP, INC. 2016

For more information, please contact:

Sean CoghlanDirectorInvestor Research+1 215 988 [email protected]

Michael MorroneResearch Analyst, MultifamilyInvestor Research+1 312 228 [email protected]

Real Estate

U.S. homeownership rates and trends (Q1 2016)