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6 Graphs Showing the Strength of the Current Housing Market


In the third quarter of 2019, the U.S. homeownership rate rose again, signaling another strong indicator of the current housing market.The U.S. Census Bureau announced, “The homeownership rate of 64.8 percent was not statistically different from the rate in the third quarter 2018 (64.4 percent), but was 0.7 percentage points higher than the rate in the second quarter 2019 (64.1 percent).” Today there is still a lack of inventory, particularly at the entry and middle-level segments of the market, but that is not stopping buyers from making every effort to pursue homeownership. The many financial and non-financial benefits continue to drive the American Dream and will likely do so for generations to come.

The National Association of REALTORS® surveyed their members for the release of their Confidence Index. The REALTORS® Confidence Index is a key indicator of housing market strength based on a monthly survey sent to over 50,000 real estate practitioners, who are asked about their expectations for home sales, prices, and market conditions. Homes across the country are selling quickly, in an average of just 27 days.

Seniors born after 1931 are staying in their homes longer than previous generations, instead choosing to “age in place.” Freddie Mac found that, “this trend accounts for about 1.6 million houses held back from the market through 2018, representing about one year’s typical supply of new construction, or more than half of the current shortfall of 2.5 million housing units estimated in December’s Insight.Older Americans prefer to age in place because they are satisfied with their communities, their homes, and their quality of life.” According to the National Association of Realtors, we are in a seller’s market. A ‘normal’ housing market requires 6-7 months inventory, a level we have not achieved since August 2012.

First American’s Real House Price Index (RHPI) “In 2019, the dynamic duo of lower mortgage rates and rising incomes overcame the negative impact of rising house price appreciation on affordability. Indeed, affordability reached its highest point since January 2018. Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers – surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.” Though the price of homes may still be rising, the cost of purchasing a home is actually falling.

Americans are improving their credit scores and building toward a stronger financial future, especially after the market tumbled during the previous decade. With today’s strong economy and increasing wages, many Americans have had the opportunity to improve their credit over the past few years, driving this national average up. Since Americans with stronger credit are now entering the housing market, we are seeing an increase in the FICO® Score Distribution of Closed Loans.

According to the 2018 Bank of America Homebuyer Insights Report, 74% of renters plan on buying within the next 5 years, and 38% are planning to buy within the next 2 years. When those same renters were asked why they disliked renting, 52% said rising rental costs were their top reason. It’s no wonder rising rental costs came in as the top answer. The median asking rent price has risen steadily over the last 30 years, as you can see in this graphic.


Some Highlights:

  • Keeping an eye on the current status of the housing market is one of the best ways to make powerful and confident decisions when buying or selling a home.

  • Mortgage rates remaining near historic lows and houses selling in an average of only 27 days are just two key elements driving the strength of today’s market.

  • With the national data shown here, make sure to also determine what’s happening in your local market so you are fully informed when you’re ready to make your next move.

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