Data released by the Census Bureau’s Housing Vacancies and Homeownership survey (CPS/HVS) show that the minority homeownership rate increased to 49.3 percent in the first quarter of 2020, up 2.2 percentage points from the first quarter of 2019 (Figure 1). This is the highest it has been since the first quarter of 2010 (49.5 percent). The year-over-year gain in the minority homeownership rate is double the gain in the overall U.S. homeownership rate, which rose 1.1 percentage points to 65.3 percent in the first quarter of 2020. These gains precede the economic impact of the coronavirus pandemic, however. Fallout from the virus will continue to negatively impact the housing market in the short-term.

Breaking down the minority homeownership rate shows that the black homeownership rate gained the most in the first quarter, with a 2.9 percentage point increase to 44.7 percent (from 41.8 percent in the first quarter of 2019). This is the highest the black homeownership rate has been since the fourth quarter of 2012.

The homeownership rate of Other households (Asian, Pacific-Islander, Native American, and other race households) posted the second largest gain of 2.1 percentage points to reach 58.4 percent in the first quarter of 2020 (from 56.3 percent in the first quarter of 2019).

The Hispanic homeownership rate also had a sizable gain in the first quarter, rising 1.5 percentage points to 48.9 percent (from 47.4 percent in the first quarter of 2019).

Meanwhile, the white homeownership grew by 0.5 percentage points to 73.7 percent in the first quarter (from 73.2 percent in the first quarter of 2019). The white homeownership rate has not declined year-over-year since the first quarter of 2017 (Figure 2).

Low mortgage rates and a healthy job market in the first two months of the year boosted homeownership rates. The emergence of COVID-19, however, has created uncertainty that will impact the housing market and consequently, homeownership rates in the coming months. NAHB expects the housing market to return to solid footing in the later part of the year.

While home buyers report slightly more optimistic expectations for future housing availability (see earlier post) in the first quarter of 2020, there is no commensurate improvement in their outlook for affordability. In fact, 78% say they can afford fewer than half the homes available in their markets, the same share as a year earlier. This in turn means that only 23% of buyers can afford half or more of the homes for-sale in their markets, essentially unchanged from a year earlier (22%).

At least 75% of buyers in each of the four generations can afford fewer than half the homes for sale where they live. Geographically, 74% to 80% of buyers in every region of the country say they can afford under half of the homes available in their areas.

The timing of the data collection for this report is highly consequential. The online survey was in the field from March 17 through March 28, the early stage of the COVID-19 crisis in the US. About 12 million people filed for unemployment benefits in the two weeks immediately after data collection closed. For this reason, we assess that responses in this quarter’s report mostly reflect people’s views prior to the full impact of stay-at-home orders and social distancing restrictions imposed by local and state governments.

* The Housing Trends Report is a research product created by the NAHB Economics team with the goal of measuring prospective home buyers’ perceptions about the availability and affordability of homes for-sale in their markets. The HTR is produced quarterly to track changes in buyers’ perceptions over time. All data are derived from national polls of representative samples of American adults conducted for NAHB by Morning Consult. Results are not seasonally adjusted due to the short-time horizon of the series, and therefore only year-over-year comparisons are statistically valid. A description of the poll’s methodology and sample characteristics can be found here. This is the third in a series of five posts highlighting results for the first quarter of 2020. See previous posts on plans to buy and housing availability.

NAHB analysis of Census Construction Spending data shows that total private residential construction spending stood at a seasonally adjusted annual rate (SAAR) of $550.3 billion in March. It was up 2.3% in March, after decreasing 4.8% in February. On a year-over-year basis, total private construction spending rose 8.8%.

The monthly gains are largely attributed to the growth of spending on improvements and multifamily construction. Private residential improvements, which include spending on remodeling, major replacement, and additions to owner-occupied housing units, increased to $189.0 billion annual pace in March, up 10.2% over the February estimates. Multifamily construction spending inched up 2% in March, following an increase of 1.2% in February. Spending on single-family construction slipped 2.0% in March, the first dip since July 2019, due to the virus impacts.

The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the solid growth in single-family construction and home improvement from the second half of 2019 to February 2020, before the COVID-19 hit the U.S. economy. New multifamily construction spending slowed down since August 2019, after the strong growth from 2010 to 2016 and a surge from the late 2018 to early 2019.

Spending on private nonresidential construction declined 1.8 percent over the year to a seasonally adjusted annual rate of $462.3 billion. The annual nonresidential spending decline was mainly due to less spending on the class of lodging ($4.3 billion), followed by educational category ($3.6 billion), and amusement and recreation ($2.3 billion).