January 8, 2020
With the new year underway, Realtor.com examined trends that shaped the housing market over the previous year. In its report, “Annual Housing Market Report 2019,” the organization touched on topics that included housing affordability, supply and demand and generational trends.
In brief, the top trends were:
Constricted growth in home sales. According to Realtor.com, the reason behind this involved low inventory and buyer exhaustion, when it came to finding homes amid the dwindling inventory.
Continued low mortgage rates. Low mortgage rates prevented home prices from further deceleration. While the search for affordability drove buyers to lower-priced secondary markets (meaning upward pressure on sale prices), large, overheated markets “struggled to sustain levels of price growth,” said Realtor.com.
A very slight improvement in housing affordability. The improvement, however, was unequal across income levels, with higher-income households achieving more affordability, with help from growing paychecks.
Continued supply/demand mismatch. A gap remained in what buyers wanted, and what was for sale. Buyers regularly sought out homes priced at least 9% below the nation’s media price of $315,000.
Lower costs of borrowing drove homebuying vs. renting. Thanks to more buyer-friendly mortgage rates, purchasing a home was more attractive than renting in many markets.
Housing demand in suburbs and exburbs outpaced that in urban areas. Inventory accumulated in denser urban areas before less-dense neighborhoods. Historical decrease in time spent on market grew more quickly in urban markets.
Millennials stepped up. At the end of Q3 2019, the millennial share of primary home loan originations increased to 46% from the previous number of 43%.
Investor home-buying growth increased. Investor home-buying growth outpaced total home sales; the investment share of total sales increased from 7.1% in Q2 2018 to 7.7% in Q2 2019.
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