Much optimism has returned to the housing market in the past week. Here are a few of the interesting insights in case you missed them.
Buying conditions improved in the second quarter
Attom Data Solutions reported data this week that shows housing is becoming more affordable for average earners in many parts of the country. Sample snippet:
“Portion of wages needed for home ownership exceeds 28 percent lending benchmark in almost three-quarters of the nation, but affordability is now better than historical averages in half the country; coronavirus is yet to have major impact on home affordability.”
Millennial homeownership is delayed, but not denied
According to survey data from ApartmentList in 2019, 88 percent of millennials value homeownership as an important measure of personal success. The primary constraint on today’s homeownership rate is likely a low supply of houses for sale. Sample snippet:
“Demographic and economic fundamentals and access to cheap credit will keep increasing the gap between potential homeownership demand and the actual homeownership rate, as Millennials wanting to buy a house outpace the new supply of homes.”
Median existing home price is up YoY for 99th consecutive time
Fifty-eight percent of homes sold in May 2020 were on the market for less than a month. Historically, first-time homebuyers make up 33% of the existing sale market. First-time buyers were responsible for 34% of sales in May, down from 36% in April 2020 and up from 32% in May 2019.
Supply is limited, properties are nearly flying off the market with almost 10 contracts for every 10 new listings. At this pace, there is a risk of prices rising too fast and hindering first-time buyer’s ability to buy, even with all-time low-interest rates.