With the rapid pace of the current real estate market it is hard to believe the home-ownership rate is near its lowest level in more than 50 years. In 2016, the national home-ownership rate averaged 63.4%, which is down 5.8% from the pre-recession peak. The national home-ownership rate jumped to 69.2 percent, adding about 11.3 million new owner households nationwide from the 1990s to 2004.
Between 2007-2015 9.4 million homes were lost to foreclosure, short sales, and deed in lieu of foreclosures. Other factors reducing the home-ownership rates were tight mortgage credit, adult children moving back in with parents, and job losses causing household incomes to plummet.
Although the median household income did rise in 2015, by 5.2 percent to nearly $56,500, it is still below the pre-Recession high of more than $57,400 in 2007. The incomes among 25- to 34-year-olds dropped by 18 percent, and between 2007-2014.
As the economy continues to improve and financial security improves there should be an increase in the number of households entering the for-sale market.
With improved finances families should expand and spur demand for larger homes. The decrease in foreclosure activity, along with improving economic conditions, will particularly help first-time buyers.
As the economy continues to improve our inventory will continue to diminish until new construction can help fill the void. Interest rates are still low and homes are affordable, but interest rates and home prices are expected to rise slightly in 2017.
If you are thinking about buying or selling in 2017, it is important to work with an experienced real estate agent that monitors new listings as they hit the market, and can respond quickly.
Ask the Real Estate Agent is a weekly column by Cheryl Kempenich of Coldwell Banker Burnet, who lives and offices in the Chisago Lakes Area. Submit your questions to firstname.lastname@example.org. All information is deemed reliable but not guaranteed. For legal assistance consult an attorney.