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2 HOUSING HIGHLIGHTS FROM THE 2014 ACS Jed Kolko Senior Fellow T E R N E R C E N T E R F O R H O U S I N G I N N O V A T I O N UC B E R K E L E Y

3 Housing highlights from the 2014 ACS 3 1. Homeownership and household formation 2. Housing costs 3. Vacancy rates 4. Appendix: ACS vs HVS 5. About the data

4 The homeownership rate continues to slide Homeownership rate 68% 66.9% 67.3% 67.2% 67% 66.6% 65.9% 66% 65.4% 65% 64.6% 63.9% 64% 63.5% 63.1% 4 63% 62% 61%

5 Homeownership higher in Midwest, lower in big coastal metros 5 Homeownership rate, 2014, large metros HIGHEST 1 Minneapolis-St. Paul-Bloomington, MN-WI 69.9% 2 Pittsburgh, PA 69.3% 3 St. Louis, MO-IL 68.7% 4 Detroit-Warren-Dearborn, MI 68.0% 5 Birmingham-Hoover, AL 67.5% LOWEST 1 Los Angeles-Long Beach-Anaheim, CA 48.3% 2 Las Vegas-Henderson-Paradise, NV 50.3% 3 New York-Newark-Jersey City, NY-NJ-PA 50.7% 4 San Diego-Carlsbad, CA 52.2% 5 San Francisco-Oakland-Hayward, CA 53.2%

6 All growth in occupied housing units since 2006 has been in rentals (millions) 2014 (millions) Change, (millions) Change, (%) Single-family owner-occupied % Single-family renter-occupied % Multi-unit owner-occupied % Multi-unit renter-occupied % All occupied housing units (includes other housing types) %

7 In past year, more of all housing types; but single-family rentals still lead 7 Change in occupied housing units, by type Single-family, rented 2.1% Multi-unit, rented 1.8% Multi-unit, owned 0.8% Single-family, owned 0.3% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

8 No slowdown in single-family rentals % 17.0% 16.0% 15.0% 14.0% 13.0% 12.0% Rental share of occupied single-family detached homes 13.2% 13.1% 13.4% 14.0% 14.8% 15.1% 15.7% 16.4% 16.7% 17.0%

9 Finally, after several years, an increase in owner-occupied single-family homes Owner-occupied single-family homes (millions)

10 Household formation volatile but remains consistently below 1.2m normal level 10 1,200 1, Household formation (change in # of occupied housing units, 000s)

11 Housing highlights from the 2014 ACS Homeownership and household formation 2. Housing costs 3. Vacancy rates 4. Appendix: ACS vs HVS 5. About the data

12 Overall housing cost burden at postbubble low 39% 38% 37% 36% 35% 35.0% % of all households spending 30% or more of income on housing 36.3% 36.3% 36.7% 37.3% 38.1% 37.9% 36.0% 34.8% 34.6% 12 34% 33% 32%

13 Almost half of LA & Miami households are cost-burdened 13 % of households spending 30%+ of income on housing, 2014, large metros HIGHEST 1 Los Angeles-Long Beach-Anaheim, CA 48.4% 2 Miami-Fort Lauderdale-West Palm Beach, FL 47.0% 3 San Diego-Carlsbad, CA 45.8% 4 New York-Newark-Jersey City, NY-NJ-PA 45.8% 5 Riverside-San Bernardino-Ontario, CA 44.6% LOWEST 1 Pittsburgh, PA 26.8% 2 Oklahoma City, OK 28.4% 3 Louisville/Jefferson County, KY-IN 29.0% 4 Minneapolis-St. Paul-Bloomington, MN-WI 29.4% 5 Kansas City, MO-KS 29.8%

14 Lower mortgage rates have made owning less burdensome 14 60% 50% % of households spending 30% or more of income on housing, by tenure & mortgage status 47.3% 47.6% 47.2% 47.9% 49.6% 51.1% 51.6% 50.3% 49.9% 50.1% Renters 40% 30% 34.9% 37.3% 37.9% 38.0% 37.9% 38.3% 37.2% 34.2% 32.1% 31.2% Owners with mortgage 20% 10% 0% 16.2% 17.0% 16.0% 16.3% 16.4% 16.6% 17.0% 16.0% 15.4% 15.8% Owners without mortgage

15 Housing highlights from the 2014 ACS Homeownership and household formation 2. Housing costs 3. Vacancy rates 4. Appendix: ACS vs HVS 5. About the data

16 Despite below-normal construction activity, vacancy rate holds steady 9.5% 9.0% 8.5% 8.3% Vacancy rate (excl. seasonal; % of all housing units) 8.6% 8.8% 8.9% 9.1% 9.0% 8.5% 8.4% 8.4% % 7.5% 7.6% 7.0% 6.5%

17 Vacancy rate high in slow-growing Detroit and fast-growing Vegas 17 Vacancy rate, excluding seasonal, 2014, large metros HIGHEST 1 Birmingham-Hoover, AL 12.1% 2 Memphis, TN-MS-AR 11.9% 3 New Orleans-Metairie, LA 11.9% 4 Detroit-Warren-Dearborn, MI 11.3% 5 Las Vegas-Henderson-Paradise, NV 10.9% LOWEST 1 San Jose-Sunnyvale-Santa Clara, CA 3.8% 2 Denver-Aurora-Lakewood, CO 4.1% 3 Portland-Vancouver-Hillsboro, OR-WA 4.3% 4 Salt Lake City, UT 4.3% 5 Minneapolis-St. Paul-Bloomington, MN-WI 4.3%

18 Active vacant inventory is low, while inactive vacant inventory remains high % 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 6.1% 6.7% Vacancy rate (% of all housing units) 7.1% 7.3% 7.4% 8.0% 4.6% 4.9% 5.1% 5.1% 5.2% 5.1% 4.8% 8.3% 8.0% 8.2% 8.2% 4.4% 4.3% 4.3% Active inventory (for sale/rent, sold, rented) Inactive inventory (off market incl. seasonal)

19 Single-family vacancies are elevated and inching upward 11.5% 11.0% 10.5% 10.0% 9.5% Vacancy rate, single-family homes (all vacancy reasons, incl. seasonal) 9.4% 9.9% 10.2% 10.3% 10.8% 11.0% 10.6% 10.7% 10.7% % 8.5% 8.0% 8.6%

20 Multi-unit vacancies down below 2006 level 17.5% 17.0% 16.5% 16.0% 15.5% 15.0% 14.5% 14.0% 13.5% 13.0% 14.5% 15.6% Vacancy rate, multi-unit buildings (all vacancy reasons, incl. seasonal) 16.0% 16.2% 16.7% 17.2% 16.6% 15.4% 15.1% 14.9%

21 Housing highlights from the 2014 ACS Homeownership and household formation 2. Housing costs 3. Vacancy rates 4. Appendix: ACS vs HVS 5. About the data

22 ACS reports lower homeownership than HVS, but similar trend 22 70% 69% 68% 67% 66% 65% 64% 63% 62% 61% 60% Homeownership rate 68.9% 68.8% 68.1% ACS 67.8% 66.9% 67.3% 67.2% 67.4% HVS 66.6% 66.8% 65.9% 66.1% 65.4% 65.4% 65.1% 64.6% 64.5% 63.9% 63.5% 63.1%

23 ACS and HVS both showed 2014 household formation of ~1m 1,400 1,200 1, Household formation (change in # of occupied housing units, 000s) ACS HVS 1,

24 ACS reports much lower vacancy than HVS, but similar trend % 11.0% 10.0% 9.0% 8.0% 7.0% 6.0% 9.6% 7.6% 9.9% 8.3% Vacancy rate (excl. seasonal; % of all housing units) 10.4% 10.7% 10.9% 10.9% 10.8% 10.4% 10.3% 10.0% 8.6% 8.8% 8.9% 9.1% 9.0% 8.5% 8.4% 8.4% ACS HVS

25 Housing highlights from the 2014 ACS Homeownership and household formation 2. Housing costs 3. Vacancy rates 4. Appendix: ACS vs HVS 5. About the data

26 About the American Community Survey 26 Annually produced by the Census Bureau Most detailed and comprehensive regular source of housing data for the U.S. and local areas Superior to quarterly Homeownership and Vacancy Survey (HVS), though less current 9/17/15 release: 1-year published tables. Still to come: 1-year microdata (PUMS) for customized analysis: Oct 15 5-year published tables, for data on smaller geographic areas: Dec 15 5-year PUMS: Jan 16

27 ACS issues 27 These slides are based on the published ACS tables, which provide less detail than the microdata (PUMS) that will be published in October. Estimates from published tables often differ from estimates based on microdata. Metropolitan areas are Core Based Statistical Areas (CBSAs). Metro-ranking slides are based on the 51 CBSA with 2010 Census population of one million or more. Despite the large sample size of the ACS, differences between metro areas and differences over time for a single metro area might not be statistically significant. Many ACS published tables provide margin-of-error estimates for calculating statistical significance.

28 Table reference guide 28 ACS data Homeownership and household formation: B25002, B25003 Single-family vs multi-unit homes: B25024, B25032 Housing cost burden: B25101, B25106 Our calculations differ from those published in table DP04. We include zero/negative income households as cost-burdened, and include no-cash-rent renters as not costburdened. Table DP04 excludes both of those groups and collectively counts them as not computed. Vacancies: B25002, B25004 Our calculations differ from the homeowner and renter vacancy rates published in table DP04. Those rates omit vacant units that are held off market / non-transacting, which are a large and growing component of vacancy. All slides based on ACS 1-year tables HVS data All data: 7a (annual estimates of housing inventory)

29 Contact 29 (website and (Twitter)