A new survey by Gallup shows that while homeownership in the U.S. has reached a new 15-year low, the number of Americans who say they don’t think they’ll buy a home in “the foreseeable future” has grown to 41%—up from 31% just two years ago.
However, non-homeowners’ expectations of buying a house in “the next year” or “the next five years” have stayed essentially the same over the past two years, the survey shows. Gallup says the survey suggests “little change in the short-term housing market.”
“As a result, what may have been a longer-term goal for many may now not be a goal at all, and this could have an effect on the longer-term housing market,” Gallup says.
As non-homeowners’ expectations for buying a home in the foreseeable future have waned, homeownership rates have also declined from last year. In Gallup’s April survey, 61% of Americans say they own their primary residence, while 34% say they rent and the remaining 5% have other living arrangements, mostly living with their parents.
That percentage of homeownership is the lowest Gallup has measured in the past 15 years. The highest percentage of Americans who said they own their home was 74% in a poll in 2005, when the homeownership boom of the 2000s was cresting. Meanwhile, the percentage of renters is tied for the high since Gallup began asking about it in 2001.
“The low point for renting occurred in 2006 and 2007 at 22%, just before the U.S. plunged into the Great Recession,” Gallup says. “Since then, renting has become the norm for about a third of the nation’s adults. The U.S. Census bureau keeps track of homeownership in its surveys. The bureau’s most recent estimate of home ownership was 64% in the fourth quarter of 2014, roughly matching Gallup’s finding.”
Gallup speculates the Great Recession of 2007-09 is responsible for lower homeownership levels and reduced expectations of owning a home by those who currently do not.
“It is possible that homeownership will return to previous levels in the years ahead if the economy continues to improve; it is also possible that a ‘new normal’ is occurring in this country, wherein Americans won’t be buying a house for the foreseeable future,” Gallup says. “For a younger generation that is struggling with student debt, renting a home may be an increasingly safe option. Whatever the reasons, non-homeowners’ expectations for buying a home in the near future appear to be waning, and the percentage who say they own their own home is the lowest in nearly 15 years. For an economy that could benefit from a housing recovery for sustained growth this decade, this news may not be the most welcome.”
