The current housing boom is the first nationwide boom since the postwar era not driven by increased demand for owner-occupied housing.

The homeownership rate for individuals 35 years of age or younger declined across all MSAs. The homeownership rate increased only for individuals 65 years or age and older. In contrast, the homeownership rate increased for all age groups during the housing booms in the immediate postwar years and the 2000s.

The combination of the uniform decline in homeownership across most age groups—particularly first-time buyers—and increasing home prices across all tiers suggests private and institutional investors have been profiting from current mortgage market conditions. Since 2006, the national homeownership rate has declined from 69 percent to 65 percent. This shift from owner-occupied to tenant-occupied housing has increased rental prices across all cities. The increased rental prices and the expectation of future capital gains have encouraged investors to purchase single-family homes in the low and middle tiers and generated a new housing boom. These observations suggest the current housing boom is the first nationwide boom since the postwar era not driven by increased demand for owner-occupied housing. The current episode could solidify the idea that housing booms can be driven entirely by investors.

Full article at http://research.stlouisfed.org/publications/es/article/9981