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| What It Takes to Buy a Home in the U.S. |
This forty-four page annual report describes housing issues on a national basis, so this is not the place to look for your local neighborhood or city stats. Just keep these points in mind for your general knowledge. The entire report may be viewed at the end of this post.
Housing supply has been discussed constantly, especially in California. There was actually an oversupply of housing between 2000-2010, but since then builders have been slow to catch up, especially in the last 8 years. The report goes on to list various reasons for this: builder hesitance, labor shortages, new housing being built for the high end of the market instead of lower end, rising cost of materials make it difficult to build for the middle market, and objections to high density development in many areas.
But homeownership nationally is up to 64.4 percent, with the largest increase in the 25-39 age group,
in spite of worsening affordability. In California in 2017, homeowners numbered 7,137,000, at 54.9 percent of the population of 13,005,000 households. California ranked the highest of all states in the nation for number of homeowners, but states such as Delaware, Iowa, Michigan, Utah, and others, ranked higher in percent of homeowners, with New York being slightly lower in homeowner percentage compared to California, per the US Census Bureau, 2017 Community Survey.
The millennial and baby-boomer generations will be the two largest groups for housing demand: "These two large generations will propel growth in 35–44 year-olds and lift the number of older adults to new heights." The 65 and older crowd will grow by 11.1 million, and 35-44 year olds will grow by 2.9 million, all in the next decade. This will be an increase of 8.4 million households for baby boomers, who are largely expected to age in place. The demand for entry level homes will increase for the 35-44 year olds, the group with the most children.
The highest affordability rates are in metro areas where the home values are less than 3 times the income, and the median-income home could afford 84% of recently sold homes. These markets are primarily in the midwest and northeast, where as the California coastal areas have home values approximately 6 times the income.
Assuming the current housing supply issues, and the continued demand
for more housing, house prices and rents are expected to continue an
upward trend. And the constraints on housing development must be
addressed. In 2018, single family starts rose 9 percent in the West.
For the full report, go to the
State of the Nation's Housing site.
Julia Huntsman, REALTOR, Broker |
www.juliahuntsman.com |
562-896-2609 |
California Lic. #01188996
