Tuesday, October 27, 2020

HVS: Q3 2020 Homeownership and Vacancy Rates

by Calculated Risk on 10/27/2020 11:06:00 AM

The Census Bureau released the Residential Vacancies and Homeownership report for Q3 2020.

It is likely the results of this survey were significantly distorted by the pandemic.  See note from Census below.

This report is frequently mentioned by analysts and the media to track household formation, the homeownership rate, and the homeowner and rental vacancy rates.  However, there are serious questions about the accuracy of this survey.

This survey might show the trend, but I wouldn't rely on the absolute numbers. The Census Bureau is investigating the differences between the HVS, ACS and decennial Census, and analysts probably shouldn't use the HVS to estimate the excess vacant supply or household formation, or rely on the homeownership rate, except as a guide to the trend.

National vacancy rates in the third quarter 2020 were 6.4 percent for rental housing and 0.9 percent for homeowner housing. The rental vacancy rate of 6.4 percent was 0.4 percentage points lower than the rate in the third quarter 2019 (6.8 percent) and 0.7 percentage points higher than the rate in the second quarter 2020 (5.7 percent). The homeowner vacancy rate of 0.9 percent was 0.5 percentage points lower than the rate in the third quarter 2019 (1.4 percent) and virtually unchanged from the rate in the second quarter 2020 (0.9 percent).

The homeownership rate of 67.4 percent was 2.6 percentage points higher than the rate in the third quarter 2019 (64.8 percent) and not statistically different from the rate in the second quarter 2020 (67.9 percent). "
Homeownership Rate Click on graph for larger image.

The Red dots are the decennial Census homeownership rates for April 1st 1990, 2000 and 2010. The HVS homeownership rate decreased to 67.4% in Q3, from 67.9% in Q2.

I'd put more weight on the decennial Census numbers.   It is likely the results in Q2 and Q3 were distorted by the pandemic.

Homeowner Vacancy RateThe HVS homeowner vacancy was unchanged at 0.9%.

Once again - this probably shows the general trend, but I wouldn't rely on the absolute numbers.

From Census:
Due to the coronavirus pandemic (COVID-19), data collection operations for the CPS/HVS were affected during the third quarter of 2020, as in-person interviews were only allowed for portions of the sample in July (41 percent), August (53 percent), and September (100 percent). The remaining interviews were conducted over the telephone. If the Field Representative was unable to get contact information on the sample unit, the unit was made a Type A noninterview (no one home, refusal, etc). We are unable to determine the extent to which this data collection change affected our estimates.
Rental Vacancy RateThe rental vacancy rate increased to 6.4% in Q3.

The quarterly HVS is the most timely survey on households, but there are many questions about the accuracy of this survey.