Around 48% of the United States housing stock dates back to the 1980s and earlier. The median age of owner-occupied homes has rose to 41 years in 2023, up from 31 years in 2005, according to the latest data from the American Community Survey. The U.S. owner-occupied housing stock has aged rapidly particularly, particularly since the Great Recession, as the residential construction continues to fall behind in delivering new homes. According to Eye On Housing, Currently, new home construction faces headwinds such as rising material costs, persistent labor shortage and elevated…
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Home Additions and Renovations Rise Amid High Interest Rates
Many homeowners are turning to additions and renovations instead of buying and selling as interest rates hold steadily high with home prices still above average compared to before the pandemic. Homeowners are now sitting on “substantial” increases in home equity available to finance renovations, according to interior designer Sharon McCormick of Sharon McCormick Design. “Moving is expensive with Realtor commissions, closing costs, lenders’ fees, appraisals, inspections, title insurance, surveying fees, moving expenses and utility hookups adding up quickly. Uncertainty in the market and rising interest rates also play a role…
Read MoreHouse Prices Reach a New Peak, But Not Everywhere
By Mark Fleming In November 2023, the Real House Price Index (RHPI) leaped 11 percent on an annual basis. Affordability improved modestly on a monthly basis, as mortgage rates fell from the previous month. Two factors drove the sharp annual decline in affordability – a 7.7 percent annual increase in nominal house prices, according to our First American Data & Analytics House Price Index, and a 0.6 percentage point increase in the 30-year, fixed mortgage rate compared with one year ago. For home buyers, holding prices constant, the only way to…
Read MoreFinance is Shaping Homebuilding Today
Resolution and adaptability are key for builders to deliver a much-needed supply of homes By Michael Berke As builders strive to overcome financing obstacles, the challenging environment is fueling clear shifts in the industry. Financing constraints have created disruption and uncertainty for many who fight to commence their projects. Simultaneously, the desire for homeownership remains strong and supply is short. The effort for builders and developers to fill their capital stack has become burdensome. Those projects that still make sense find their home prices increasing to maintain margins. Many fully…
Read More2024 Housing Market Outlook
Though things are looking up, it’s not too hot, not too cold, but not quite right either By Mark Fleming The housing market has been on quite the roller coaster ride since the beginning of the pandemic. While it was strong before 2020, the onset of the pandemic and the societal changes it triggered redefined the role of a home. As work-from-home became the new normal, a house was no longer just a dwelling or a vehicle for wealth creation, but also an office, a classroom, a daycare and even…
Read MoreMortgage Rates Will Drop Below 6% This Year, Says Fannie Mae
Fannie Mae, a government-sponsored enterprise that purchases home loans from mortgage lenders, recently released a report predicting that mortgage rates will begin to come down slowly from their current mid-6% range levels. According to Money, Rates have already decreased by more than a percentage point since last October. If Fannie Mae’s current prediction comes true, the rate will have gone down by almost two percentage points from its 2023 high of 7.79% — a change that will have an increasingly significant impact over time for homebuyers and sellers. Fannie Mae’s…
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