Buyer Traffic Strong; Sellers Still Hesitant

Housing demand remains strong this summer, even as inventory issues persist in many markets across the country, according to the REALTORS® Confidence Index for June.

Overall housing demand this summer is on the rise due to more jobs being created and by low mortgage costs. According to NAR Research, “Job creation is strongly associated with the demand and supply of homes: strong job growth improves the prospect for home ownership, while job contraction in an area may lead to more homes being sold as people move out of the area.”

More details and national chart at: “Buyer Traffic Continued to Outpace Supply in Many States in April–June 2016,” National Association of REALTORS®’ Economists’ Outlook Blog (Aug. 3, 2016) and REALTORS® Confidence Index

The Baby Boomers Are Driving Growth

Baby boomers are the “driving force” of household formation, which is critical for real estate demand, according to a new blog post at the National Association of REALTORS® Economists’ Outlook blog.

The highest gains in household formation have been by 65- to 74-year-olds, who accounted for 860,000 new households alone from the first half of 2014 to first half of 2015, according to Census Bureau data. The 55 to 64 age group comprised the second highest at 391,000, followed by people over 75 years of age who formed 264,000 new households during that time period.

Meanwhile, younger age groups had less. The 20 to 24 age group had negative net household formation numbers of 85,000. The 25- to 34-year-old age group, however, had 159,000 new households during that time.

Young professionals have been slow to form their own households. The share of the population living with parents has risen dramatically over the last few years. For the 25- to 29-year-old age group, the percentage has risen from 10 percent in 1980 to 25 percent by 2013. Also, the share of 25-to 29-year-olds who have never been married has dropped from 70 percent in 1980 to less than 40 percent in 2013.

Source: “Baby Boomers Lead Recent Household Formation,” National Association of REALTORS® Economists’ Outlook blog (Sept. 25, 2015)