The Partnership for Housing Affordability, a non-profit associated with the Richmond Association of Realtors, hosted a forum on single-family housing affordability sponsored by SunTrust Mortgage. The forum focused on the current trends in the sale and development of single family homes and how that impacts affordability. The keynote speaker was Paul Bishop, Vice President of Research with the National Association of Realtors. He delivered some great statistics, click the image above to access the full report.
Demographic Trends
- $1 in $5 is connected to the real estate industry
- 87% of consumers think home ownership is a good investment
- In 2017, the largest cohort of home buyers were millennials
- 36% of buyers were millennials
- 26% were Gen Xers
- Of first-time homebuyers, 72% are millennials, 19% are Gen X
- Of repeat buyers, 29% are Gen X, 24% are younger boomers, 18% are millennials
- 60% of all homebuyers are married couples, but single females are a rising group (increases with age, older boomers and Silent Generation females are buying lots of homes)
Current Market Trends
- Months of supply peaked nationwide in late 2010 at 12 months
- bottom is now in 2018, at 3.6 months
- Limited supply is causing prices to increase significantly, even as much 5-6% annually
- Home construction is at its lowest level since 2009
- What’s holding builders back?
- Lack of skilled labor
- Lack of buildable lots
- Cost of raw materials
- Approval process for new construction
- Financing availability
- Inventory issues aren’t poised to change for the next 1-2 years
Affordability
- Rents are increasing at 4% per year, outpacing incomes
- Top reason people can’t afford to buy homes is uncertain income
- Affordability rates: people earning less than $25,000 can afford just 10% of all currently listed homes, people making less than $50,000 can afford just 30% of available homes
- Over 1/2 of US renters live in structures with 4 units or less
- 39% of the US rental market is made up of single family homes