6 Key Trends: State of the Nation’s Housing Report
August 2, 2016 |
Published by Harvard University’s Join Center for Housing Studies, the State of the Nation’s Housing Report uses data from a number of sources, including the US Census Bureau, HUD, Bureau of Economic Analysis, NAR, Zillow and a number of other sources to develop its findings.
Overall, the report indicates positive trends for the housing industry. These trends will also benefit the residential Real Estate business!
1. The housing market shows continued recovery
Construction is gaining momentum, with single family housing starts up 10.5% over 2015, while multifamily starts were at a 27 year high. Home sales are strengthening, with new home sales up 14.6% and existing home sales up 6.3%. Home prices are also on the rise.
2. Headwinds to development remain
The construction labor force lost more than 2 million workers between 2007 and 2013; only 40% returned to the industry. There is a shortage of construction ready lots, and credit is beginning to tighten for some construction loans.
3. Demand-side trends are driving growth
Household formation has finally picked up. Over the next 10 years, the millennial generation is expected to form 2 million households per year, as their income growth rises.
4. Challenges to home ownership remain
National home ownership rates fell from 69% in 2004 to just 63.7% in 2015. This was driven by tight mortgage credit and foreclosures. Down payment pressures affect many people who want to buy. Despite these trends, most Americans still believe home ownership is desirable, as well as attainable.
5. Rental markets continue to surge
Rental housing demand remains high, with 36.4% of households opting to rent in 2015. Prices remain high for rentals, and the national rental vacancy rate has fallen steadily since 2010 to 7.1%. Demand for low-cost rentals outstrips supply.
6. Affordability issues affect more of the population
The number of cost-burdened renters (those paying more than 30% of income for housing) reached 21.3 million in 2014. This is a record high, and forced many of these renters to cut back their spending on other vital needs.
Source: Harvard Joint Center for Housing Studies, The State of the Nation’s Housing, 2016, www.jchs.harvard.edu. All rights reserved.