The U.S. homeownership rate fell to the lowest level since 1994 in the fourth quarter of 2014 amid ongoing fallout from the financial crisis and falling demand from first-time home buyers.
The Census Bureau reported Thursday that the homeownership rate fell from 64.4 percent to 64 percent to end the year. The rate was down by 1.2 percentage points from the year before.
The homeownership rate peaked at 69.4 percent during the housing bubble year of 2004. Since then it has fallen steeply as the housing market collapsed and family incomes fell during the recession and as U.S. demographics have changed.
Sales of homes to first-time homebuyers have lagged badly through December, as younger, would-be buyers face tougher job prospects and, in some cases, higher levels of student debt than others have in past years.
Homeownership rates have fallen for all age and racial or ethnic groups, according to the Census Bureau.
The homeownership rate for people under age 35 has fallen from above 41 percent to near 35 percent since the beginning of 2008, right as the country slipped into recession.
The ongoing decline in homeownership comes even as the federal government has sought to limit the weak economy’s effect on home buying. The Federal Reserve has promoted low interest rates through monetary easing. The latest average interest rate on a 30-year fixed-rate mortgage is 3.66 percent, according to Freddie Mac. The Obama administration has also sought to reverse tight credit conditions imposed by lenders in the wake of the recession through federal housing agencies and government-sponsored enterprises.
There was good news in Thursday’s report, however. There were 1.65 million new occupied units in 2014, reflecting new household formation. That included an increase in over 2 million new renting households to offset a decrease of roughly 400,000 owning households.
