More new US households chose to buy than rent in the first quarter, marking the first time in a decade that new households have favored buying over renting, according to a Wall Street Journal report.
According to Census Bureau data, 854,000 new-owner households were formed in the first quarter of 2017, handily beating the 365,000 new-renter households formed in the same quarter.
The Q1 numbers mark the first time since the third quarter of 2006 that new-owner households exceeded the number of new-renter households, Trulia Chief Economist Ralph McLaughlin told the Journal.
“The fact that many new owner-occupied households are forming is really our first sign that the homeownership rate is on the rise,” McLaughlin said.
The homeownership rate fell from 63.7% in Q4 2016 to 63.6% in Q1 2017, but was still a significant increase from the 50-year low homeownership rate of 62.9% in Q2 2016.
The rise in new-owner households is also a good sign for consumer confidence in the wider economy, Deutsche Bank economist Joseph LaVorgna told the Journal.
“People are looking at housing as being a bit more attractive as memories of the financial crisis fade,” LaVorgna said.
Another indication of the increase in the demand for homeownership is the boom in existing-home sales. Existing-home sales reached a decade-high peak in March, rising by 4.4% to a seasonally adjusted annual rate of 5.71 million homes, according to the National Association of Realtors (NAR).
NAR also reported a boost in the interest of first-time buyers, who made up 32% of the market in March, up from 30% in the same month last year.