One telling indicator of the state of the nation’s housing is the drop in the homeownership rate to just 64.5 percent last year, erasing nearly all of the increase in the previous two decades. The number of homeowners fell for the eighth straight year, signaling persistently weak demand in this key market segment. And the trend does not appear to be abating, with the national homeownership rate down to 63.7 percent in the first quarter of 2015.
The falloff is evident across nearly all age groups. In fact, the national homeownership rate remains as high as it is
only because the baby boomers (born 1946–64) are now in the 50-plus age groups when homeownership rates are high, and because owners aged 65 and over have sustained historically high rates. In sharp contrast, it was generation X (also known as the baby bust, born 1965–84) that took most of the hit from the housing bust.
Just before the crash, younger gen-Xers were in the prime first-time homebuying years while older members of this
generation were at the stage when households tend to trade up or make significant improvements to their existing homes. When prices plummeted, many of these owners had little or no equity to weather the recession. As a result, homeownership rates among gen-Xers—now mostly in the 35–44 and 45–54 year-old age groups—have fallen further than those of any other age group, and stand 4–5 percentage points below rates among same-aged households 20 years ago. Whether these households eventually catch up to the baby boomers in terms of homeownership is unknown.