Tag Archives: housing market

What Does the Future of the Housing Market Look Like?

It’s no secret that the housing market is tough right now for builders and Realtors alike. A recent article on Builder Magazine stated that the future of the housing market will hinge on job creation.

Last week, The Joint Center for Housing Studies at Harvard University released “The State of the Nation’s Housing 2011,” its annual outlook on housing and homeownership through the rearview mirror of the past few years. The essence of the report, which the Joint Center embargoed for publication until this morning, is that the strength of housing’s recovery “will rest on how fully employment bounces back.”

Although many of these statistics aren’t surprising to anyone who follows the market closely, they are interesting to think about in terms of the future of the housing market:Housing Market, Real Estate Market

  • The national homeownership rate fell below 67% in 2010, down from 69% in 2004. The excess inventory of unsold homes in 2010 equaled about 700,000 for-sale homes and 160,000 rentals.
  • While most baby boomers are expected to age in place, one in three heads of households aged 65 to 74 relocated in the previous decade, many to smaller homes. If that mobility rate continues, some 3.8 million aging boomers would be moving in this decade. At any rate, baby boomers are projected to increase the number of households over age 65 by 8.7 million, or 35%, in this decade.
  • Even though homeownership rates among young adults were slipping before the recession hit, and that slippage accelerated during the recession, the Joint Center still believes that enough echo boomers will want to buy a home to boost the number of young adult households over the next decade. “Indeed, assuming headship rates revert to their 2007-9 average, and that immigration is just half of what the Census Bureau now projects, the number of households under age 35 will grow to nearly 26.5 million in the next decade.”
  • The “one bright spot” in the housing sector recently is the rental market. Between 2007 and 2009, 1.4 million single-family homes became rental properties. And between 2004 and 2010, the number of renter households expanded by 3.9 million to a total of 37 million. Last year, rental vacancy rates fell to 9.4% in the fourth quarter, the lowest rate since 2003, which reverses a trend in previous years where supply was significantly outpacing demand. However, low-income rental continues to dissipate.
  • Minorities will account for seven out of 10 of the projected 11.8 million new households in 2010-20 (which the Joint Center says is a conservative estimate). Hispanics alone will contribute nearly 40% of that increase, and by 2020 minorities should make up one-third of all U.S. households.

Do you see yourself buying a home in the next 5 to 10 years? Why or why not?

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Most Americans Still Want to Buy & Own a Home

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The economy and housing market has been tough over the past several years. However, 51 percent of current owners and renters still want to buy a home, according to a study by Fannie Mae. These numbers are up from previous surveys.

Housing foreclosures also recently fell to their lowest levels in 18 months, according to an article on MSNBC.com. New construction is actually increasing for the first time in a few years.

Builders broke ground last month on new homes at a seasonally adjusted annual rate of pace of 555,000 units, a 3.9 percent rise from October, the Commerce Department said Thursday.

That compared with a rate of more than 2 million units at the height of the boom in 2005 and is just 16 percent above the 477,000 unit pace of April 2009 — the lowest point on records dating back to 1959.

Later on in the article, it’s said that:

The weak housing market is one of the negative forces confronting a slowly improving economy. So is high unemployment, now at 9.8 percent.

Each new home built creates, on average, the equivalent of three jobs for a year and generates about $90,000 in taxes, according to the National Association of Home Builders.

Looking to buy a high quality newly-constructed home at a reasonable price? Check out our website at www.michbuilder.com to see what we have to offer.

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