Slow GDP Growth

U.S. economic growth, as measured by gross domestic product (GDP), has slowed dramatically. Growth was under 1.5% for the past two quarters, the worst six-month performance in nearly three years. The two primary drags on GDP are inventories and trade. The drag from reduced inventory accumulation has continued longer than expected, which should eventually correct. Trade, however, will continue to be a problem, as the U.S. dollar has stayed stubbornly high and emerging market economies continue to struggle, hurting exports.

Declining Homeownership

The U.S. homeownership rate declined across almost all regions and age groups. The rate declined by 0.2% year over year, and by 0.3% quarter over quarter, to 63.5% in the first quarter of 2016. Homeownership fell 1.2% in the Northwest, 0.5% in the South, and 0.3% in the West, while the Midwest saw an increase of 0.8%. Homeownership rates by individuals younger than 35 fell 0.5% to 34.2%, for the 35–44 age group fell 0.4% to 58.9%, for the 45–54 age group fell 0.9% to 69.2%, for the 55–64 age group rose 0.5% to 75.7%, and for those over 65 fell 0.5% to 78.8%. Moody's Analytics forecasts suggest that homeownership rates will decline for the rest of 2016, but pick up thereafter as the economy strengthens.

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