Homeownership rate falls
The U.S. homeownership rate ended the second quarter at 65%, its lowest level since 2019, the U.S. Census Bureau reported Monday.
"With mortgage interest rates remaining elevated and housing supply still tight, housing affordability is at a multidecade low," the National Association of Home Builders' Na Zhao wrote in a blog post.
The homeownership rate fell from 65.1% in the first quarter. Among the four regions, the Midwest had the highest rate in the second quarter at 69.5% and the West posted the lowest rate at 60.7%.
The homeownership rate for consumers under 35 dipped to 36.4%, near the lowest level in the past six years, Zhao said.
Joblessness weighs on housing market
Add a sluggish labor market to the challenges facing the housing market.
While initial unemployment claims last week fell to a three-month low of 217,000, continuing claims are up 5% over the past year, Wells Fargo noted in a report.
"In other words: layoffs are low, but those who are laid off are having increasing difficulty finding new employment," the report stated.
The banking giant went on to say that the housing market is entering "an early winter." Aside from prospective buyers' ongoing affordability concerns, homebuilders are dealing with larger inventories of unsold homes.
Economic outlook slows
The national Conference Board Leading Economic Index, or LEI, fell by 0.3% in June after no change in May.
Low consumer expectations and weak new manufacturing orders affected the index, the board said. The index is meant to signal peaks and troughs in the business cycle and includes a compilation of the average weekly hours in manufacturing, building permits for new homes and other data points.
"At this point, The Conference Board does not forecast a recession, although economic growth is expected to slow substantially in 2025 compared to 2024," Justyna Zabinska-La Monica, a senior manager at The Conference Board, in a statement.