A larger number of Americans—notably fueled by millennials—entered home ownership during the summer months. The national home ownership rate rose to 64.4 percent in the third quarter—a half percentage point higher than a year ago, the U.S. Census Bureau reported this week.

The increase was largely attributed to a rise in first-time buyers as more millennials entered home ownership. The ownership rate among those under the age of 35 climbed from 35.6 percent in the third quarter of 2017 to 36.8 percent in the third quarter, according to the bureau’s report.

“More people are choosing home ownership over renting, and a large part of that story is the historically large number of first-time home buyers,” says Tian Liu, Genworth Mortgage Insurance’s chief economist. “In the past two years, first-time home buyers have purchased at least 1.9 million homes each year. That is more than the pace of household formation over the same period, meaning that the transition from renting to owning is the more powerful driver of housing demand.”

Liu says that has been an often overlooked reason for the rapid increase in home prices. “Paradoxically, the rise of first-time home buyers, which has pushed home prices up, also is slowing home sales today.” Liu says. “These events caused the home ownership rate and home sales to diverge this quarter.”

However, the home ownership rate among several age groups did see a drop in the third quarter. For example, the ownership rate of those between ages 35 to 44 dropped slightly from 60 percent in the second quarter to 59.5 percent in the third quarter. The ownership rate of those between the ages of 45 to 54 years old also saw a drop, decreasing from 70.6 percent in the second quarter to 69.7 percent in the third quarter.

On the other hand, Americans between the ages of 55 and 64 and those who are 65 and older both saw increases in ownership rates in the third quarter.

Despite the overall uptick in the ownership rate in the third quarter, home ownership still remains far from its all-time high of 69.1 percent set in 2004. The home ownership rate has shown gradual improvement since hitting bottom at 62.9 percent in 2016.

Lower affordability and continued inventory crunches aren’t sidelining single women home buyers, who, for the second consecutive year, account for 18 percent of all buyers, according to the National Association of REALTORS®’ 2018 Profile of Home Buyers and Sellers. Single women are the second most common buyer type behind married couples (63 percent), according to NAR’s report. Single men are the third most common buyer type, accounting for half the number of their female counterparts at 9 percent. However, single men tend to purchase pricier homes than single women—a median of $215,000 compared to $189,000, respectively.

Single women buyers, many of whom are first-timers, are proving a powerful force in the housing market. However, first-time buyers, who once dominated the buying pool, are a shrinking segment. The share of first-time buyers fell to a three-year low this year, according to NAR’s report. First-time buyers comprised 33 percent of the housing market this year, down from 34 percent last year. The number of first-time buyers has not gone above 40 percent since the first-time home buyer tax credit ended in 2010, NAR notes.

“With the lower end of the housing market—smaller, moderately priced homes—seeing the worst of the inventory shortage, first-time home buyers who want to enter the market are having difficulty finding a home they can afford,” says NAR Chief Economist Lawrence Yun. “Low inventory, rising interest rates, and student loan debt are all factors contributing to the suppression of first-time home buyers.”

However, Yun notes that existing-home sales data has shown in recent months that inventory is rising slowly on a year-over-year basis. That may “encourage more would-be buyers who were previously convinced they could not find a home to enter the market,” Yun says.

Borrowers were faced with rising mortgage rates again this week, after a slight pause from increases the week before.

“Despite volatility in the stock market, the 30-year fixed-rate mortgage inched forward just 1 basis point to 4.86 percent this week,” says Sam Khater, Freddie Mac’s chief economist. “We expect rates to continue to rise, which will put downward pressure on home buying activity. While higher borrowing costs will keep some people out of the market, buyers with more flexibility could take advantage of the decreased competition.”

Freddie Mac reports the following national averages with mortgage rates for the week ending Oct. 25, 2018:

• 30-year fixed-rate mortgages: averaged 4.86 percent, with an average 0.5 point, rising slightly from last week’s 4.85 percent average. Last year at this time, 30-year rates averaged 3.94 percent.
• 15-year fixed-rate mortgages: averaged 4.29 percent, with an average 0.4 point, rising from last week’s 4.26 percent average. A year ago, 15-year rates averaged 3.25 percent.
• 5-year hybrid adjustable-rate mortgages: averaged 4.14 percent, with an average 0.3 point, climbing from last week’s 4.10 percent average. A year ago, 5-year ARMs averaged 3.21 percent.

Do your clients keep renting in the same vacation destination again and again? Have they been hinting at someday buying a seasonal second home? Hippo, a home insurance company, compiled these five signs that buyers are ready to take the plunge.

1. Their finances are in order. If your clients are serious about buying a second home, then they also have to be serious about the costs involved, such as utility bills, maintenance fees, insurance premiums, and possible homeowners association dues. If they plan to rent out the property to other vacationers, help them calculate their potential return on investment. Find out if the idea fits in with their long-term financial goals. Here are some of the questions you can pose to help clients figure out if they’re prepared:

• Do you have emergency savings (at least three to six months’ worth of take-home pay)?
• Can you make a 20 percent down payment?
• If you have children, have you already put aside enough money for a college fund?
• Can you still put away enough money for retirement?
• Have you paid off your existing home?

2. They’re hungry for research. If clients are asking in-depth questions about the area and specific properties, there’s a good chance they’re preparing to buy a vacation home. Encourage them to visit during different parts of the year if they’re planning to spend a lot of time there. Introduce them to amenities in the area, such as grocery stores, restaurants, areas of recreation, and even clinics and dentists’ offices.

3. They want details on the market. More pointed, nuanced questions denote serious consideration. You can anticipate their needs by sending market updates regularly and even putting these clients on a listing drip campaign. Help them get comfortable with the idea of owning a vacation home by analyzing sales price changes and buyer demand in the vacation market in question.

4. They have a plan. Find out how your clients plan to use a property. If they want to rent out the place, then they’ll need help finding a property manager (perhaps you?), cleaning service, insurance provider, maintenance people, and other resources. Or, if they plan to manage it themselves, they’ll need to know how to list the rental and accept payment.

5. They are prepared to pay the taxes involved. Income from rental properties must be included on state and federal tax returns. Your client may also be expected to collect lodging taxes. In Fort Lauderdale, Fla., for example, vacationers pay a 12 percent lodging tax.