Florida Homeownership Rates Compared to Other States

Around the start of the pandemic, the housing market in Florida was soaring. Homeownership rates went up because everyone was taking advantage of the market. The rate increased 2.6 percent from quarter one to quarter two of 2020, the highest ever recorded. By year’s end, there were over two million more homeowners than in 2019.

So, what makes Florida different from other states? With a homeownership rate of 67.9%, above the national average of 65.5%, you might wonder what buyers are jumping at the opportunity to purchase property in The Sunshine State. Many factors impact a state’s homeownership rate; read more about those.

What Affects a State’s Homeownership Rate?

A person’s age
A person’s race
Level of education
A person’s household composition

Several factors could affect a state’s homeownership rate. Age or education can play a part in a person’s willingness or ability to become a homeowner.

Here are some demographic factors that are considered when calculating homeownership rates.

A Person’s Age

Older people tend to be more established and therefore are much more likely to own a home than someone younger. Senior citizens have the highest homeownership rate there is.

A Person’s Race

Black households have had much lower homeownership rates than white homeowners over time. Homeownership within the black community is at an all-time low, but White, Hispanic, and Asian homeownership is rising.

Level of Education

People who have less education are less likely to purchase a home. This is because a lack of education often leads to low income. Even while working full-time hours, those who don’t have a high level of education don’t usually have a high-income potential.

A Person’s Household Composition

Another factor that can affect homeownership is the living situation within a household. Is the person a single male living alone or a married couple with two children?

Married couples with children are likelier to become homeowners than single women who live alone, although they might have difficulty getting approval.

Certain economic and demographic factors greatly influence someone’s ability or willingness to purchase a home. The rate of homeownership in a state can fluctuate based on various factors, and low rates aren’t always for the reasons you might think.

Projected Homeownership Growth by 2040

By 2040, we will likely see an increase in overall homeowners of about 6.9 million but a decline in the national homeownership rate of around three percent. With each new generation, the homeownership rate has dropped lower than that of those before them.

In 2040, we’re likely to see millennials with a homeownership rate of 64 percent, 8 percent lower than the boomer generation at the same age (45-54). It’s also likely that the rate for those aged 25-44 will decline by up to 9 percent. Not to mention, 34 percent of heads of households will be senior citizens — a 7 percent increase from 2020.

What Is the US Homeowner Rate By Age?

Did you know the average age of homeowners is 56 years old? On top of that, senior citizens (65 and up) have the highest homeownership rate at 78.6 percent. Let’s break down the rate of homeowners in the U.S. based on their ages.

Homeowners under 25: 0.8% overall and 14.3% in their age group.
Homeowners aged 25-29: 3.1% overall and 30.8% in their age group.
Homeowners aged 30-34: 5.9% overall and 46.5% in their age group.
Homeowners aged 35-44: 15.7% overall and 58.6% in their age group.
Homeowners aged 45-54: 19.0% overall and 67.5% in their age group.
Homeowners aged 55-64: 23.4% overall and 73.9% in their age group.
Homeowners aged 65-74: 18.5% overall and 78.9% in their age group.
Homeowners aged 75 and up: 13.6% overall and 76.6% in their age group.

As you can see, senior American citizens are likelier to be homeowners and home buyers than any other age group. They also tend to live in their homes the longest. The longer a person remains in a home, the more equity they have.

Equity is the difference between how much your home is worth and how much you still owe on your mortgage. Older homeowners have equity because they’ve been paying their mortgage loans for longer.

Homeownership Rate in Florida

You’ll often see that the states with the lowest housing costs have the highest homeownership rates, but Florida is an exception.

Florida's average residential property cost is $232,000, almost $5,000 more than the national average. Despite offering less in terms of affordability, the housing market in Florida is quite popular compared to most other states.

The Benefits of Living in Florida

Beautiful weather
No state income tax
Cultural diversity
Great job market
Great for retirement

So, what makes Florida such a great place to live that people are willing to overlook the higher-than-average home prices? Here are some perks that have people grasping for real estate in The Sunshine State.

Florida Has Beautiful Weather

With over 200 days of the year being warm and sunny, it’s no wonder people are keen on living here.

There’s No State Income Tax in Florida

Florida is one of the few states that doesn’t tax a person’s income. While you’ll still have to pay property taxes on a home and sales tax, your overall tax costs will be much lower here.

Florida is Culturally Diverse

Florida is also a very diverse place to live. No matter which city you find yourself in, you’re bound to find individuals from all walks of life across various backgrounds and belief systems.

Florida Has a Great Job Market

Florida’s gross domestic product (GDP) is one of the largest in the nation. It takes many people to keep the state running smoothly, so plenty of jobs are available. Some top industries include aviation, financial services, information technology, manufacturing, and tourism. If you hold a degree or have real-world experience in an in-demand industry, you’ll do fine on the job market here.

Florida Is Great for Retirement

Florida is a popular retirement spot because it doesn’t tax income or retirement benefits like Social Security. There are also no inheritance or real estate taxes. Many Florida cities have become attractive retirement destinations as a result.

The homeownership rate in Florida is high and will likely continue increasing over time.

Homeownership Rates in the Other States

Here are the top 10 states for homeownership as of July 2022

West Virginia: 77.8%
Iowa: 76.8%
South Carolina: 76.6%
Maine: 76.2%
Minnesota: 75.3%
Wyoming: 73.8%
New Hampshire: 73.7%
Idaho: 73.3%
Michigan: 73.3%
Vermont: 73.3%

Homeownership Rates in the South

Homeownership rates in the south are lower in the South than in the Midwest. There are many reasons people are less likely to become homeowners in the south, and many of those reasons have to do with demographic factors such as age, income, race, and education level.

South Carolina: 76.6%
Mississippi: 72.3%
Alabama: 71.3%
Louisiana: 69.8%
Virginia: 69.4%
Florida: 67.9%
North Carolina: 67.9%
Tennessee: 67.8%
Georgia: 65.9%
Arkansas: 64.5%
Texas: 63.4%

Homeownership Rates in the Rest of the Country

Homeownership rates in the United States were 65.5 percent as of the fourth quarter of 2021. These rates are always going to fluctuate as the economy changes. We saw a rise at the start of the pandemic due to affordable properties and a steep decline shortly after.

The vacancy rate for homeowners was at 0.9 percent in the fourth quarter of 2021. A vacancy rate is the percentage of available properties that no one lives in during a particular time. These rates are often used in real estate analysis to determine how the market is doing in terms of sales.

Top 3 States for Homeownership

Here are the top three states for homeownership as of July 2022.

West Virginia: 77.8%
Iowa: 76.8%
South Carolina: 76.6%

West Virginia and Iowa have the two highest homeownership rates because it is very inexpensive (compared to the national average) to purchase property in those states, thus providing more opportunities for lower income households to enter the homeowner arena.

Bottom 3 States for Homeownership

Here are the bottom three states for homeownership as of July 2022.

New York: 53.6%
California: 54.6%
Hawaii: 58.3%

The primary reason for the lack of homeownership in these states is the high cost of living. The average residential property in California costs $538,500, with an average annual income of only $78,672, which is not very high compared to the average Californian's expenses.

It may come as a surprise that California and New York, two of the most populous states in the nation, have the lowest homeownership rates; however, because of the cost of living, this only shows that most people in these states are renters.

How Vaster Helps With Florida Home Ownership

With Vaster, aspiring homeowners can find a Florida housing loan that suits them. Whether you’re buying or refinancing, we want to be your one-stop shop for all your real estate needs. We have decades of experience providing buyers with the guidance they need to shop the market confidently.

With two of the largest real estate firms in Florida behind us, Fortune International Realty and The Related Group, we know that the best Florida lenders back us, allowing us to provide best-in-class service to you as well. Get in touch with us; our mortgage experts are ready to help you.

Sources:

How the Homeownership Rate in Florida Compares to Other States | Florida | thecentersquare.com

How Homeownership Rates in Florida Compare to Other States | theapopkvoice.com

To explain changes in the homeownership rate, look beyond demographic trends | Urban Institute

By 2040, the US Will Experience Modest Homeownership Declines. But for Black Households, the Impact Will Be Dramatic. | Urban Institute

Homeownership Rate By Age: Facts, Figures, & Trends | ipropertymanagement.com

15 Benefits of Moving to Florida | moving.com

Homeownership Facts and Statistics 2022 | Bankrate

Homeownership Will Look Much Different across States in 2040. How Does Your State Rank? | Urban Institute