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The US homeownership rate has fallen to its lowest since 1965, 62.9%.

This immense decline is reflective of a growth in the rental market amongst US residents. 967,000 more units have been rented from this time last year (the second-quarter of 2015).

Much of the decline in homeownership continues to be attributed to the recession and housing collapse of 2008, but other important factors include high student debt and higher home prices.

Interestingly enough, homeownership amongst people aged 65 and over is at a record high (77.9%). Conversely, the younger demographic is the driving force behind the shift towards renting. Only 34.1% of people aged 18-35 possess homeownership, the lowest rate in over 20 years.

“Household formation numbers suggest that if the decline [in ownership] is real, it is more likely due to a large increase in the number of renter households than any real decline in the number of homeowner households,” -Ralph McLaughlin, chief economist at real estate website Trulia.

Higher rental rates suggest a major shift in the household formation. Younger people are more focused on buying furniture, earning higher salaries (establishing their careers), and starting families before pursuing homeownership.

As of the second-quarter of 2016, US mortgage rates have hit record lows. The average interest rate on a 30-year-fixed rate is currently at 3.36%. Despite the trend signaling to rent, perhaps the younger demographics should be looking to capitalize on these record-low mortgage rates.


Cerco Funding LLC is a New York-based real estate private equity firm. Cerco acts as a direct portfolio lender originating commercial bridge loans nationwide. Cerco has extended capital for acquisitions, refinancings, repositionings, and a host of special situations.

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