The U.S. homeownership rate may fall to as low as 55 percent because more Americans are choosing to rent as they postpone getting married and having children, said Sam Zell, chairman of landlord Equity Residential.
Demographic and lifestyle changes, more than economic factors, are driving down the ownership rate over the long term, Zell said yesterday at the Milken Institute Global Conference in Beverly Hills, California. As of 2010, about 54 percent of adults were married, down from 57 percent a decade earlier, according to the U.S. Census Bureau.
“The deferral of marriage has such a staggering impact on real estate and I just don’t think people focus on it,” said Zell, 72, whose Chicago-based Equity Residential is the largest U.S. apartment landlord. “I don’t think the multifamily market has ever had a better set of future demographics.”
The homeownership rate fell to the lowest in almost 19 years, declining to 64.8 percent in the first quarter from 65.2 percent in the previous three months, the Census Bureau said today. Recovering home prices and rising mortgage rates have put real estate out of reach for some would-be buyers. Homeownership peaked at 69.2 percent in 2004.
The median age of marriage rose to 28.2 for men and 26.1 for women in 2010, up 1.4 years for men and 1 year for women from a decade earlier, continuing a trend of later wedlock that dates back to 1950, Census Bureau data show.
Zell also cited reports of a growing number of women freezing their eggs to postpone having children while they pursue their careers. That delay will further reduce demand for single-family homes, he said.
Equity Residential owns or has investments in about 110,000 multifamily units. Of the 18,000 rental apartments the company has in New York, 45 percent are occupied by single people, Zell said.
“It’s happening all over the country,” he said.