Ever feel like you just can’t get a grip on the ebbs and flows of the housing market? Don’t worry! You are not alone. As we are witnessing in our own backyard, new builds are helping to quell a nationwide housing shortage. While that has increased competition, it has also driven up home prices. Here are a few talking points to familiarize yourself with so you can have confidence when having these conversations with your neighbors:
1. Homeownership is rising again across the country
Homeownership has been on the rise for two straight years. In fact, because of the influx of younger buyers, ownership rates are now back to the rates experienced between 1985 and 1995 despite record-high prices and rising interest rates. In 2012, the nationwide monthly average home payment was $1,176. By 2018, that number soared to $1,775, but homeownership has still increased. This is may be viewed as a direct reflection of how important the value of homeownership has become.
2. Fewer people are renting
This makes total sense, right? If more people are buying their homes, less people are renting. The number of rented households dropped by over 100,000 from 2017 through 2018. This is quite the opposite of the prior 12 years when the number of renters nationwide increased each year. Another fun fact: renters now appear to be wealthier as about 25% of household incomes over $75,000 rented in 2018. Also, because of the increasing cost of rent, many renters with household incomes of $45,000-$75,000 are spending a much higher percentage of their income on rent than in years past.
3. Homes are getting bigger and less affordable
Most first-time home buyers tend to stay away from larger homes because they either don’t want them or cannot afford them. Unfortunately, just 22% of single-family homes measured in at less than 1,800 square feet. That number is down from 32% between 1999 and 2011. The reason for that shift? Simply put, it’s more profitable for home builders to put up bigger homes to sell for higher prices.
It’s important to familiarize yourself with the statistics of our local market, as well, so please invest time into learning about the areas most important to you. Remember to always ask questions of our agents as they are ready to help and are a wealth of knowledge and experience.