80% of Housing Markets Are Getting Better

The majority of the top 100 housing markets nationwide are improving compared to their historic benchmark range of housing activity, according to Freddie Mac’s Multi-Indicator Market Index.

The index measures the stability of the housing market by reflecting how single-family housing markets are performing to their long-term stable range based on home purchase applications, payment-to-income ratios (changes in home purchasing power based on home prices, mortgage rates, and household income), proportion of on-time mortgage payments, and local employment.

“The purchase applications indicator is up nearly 20 percent from last year and is reflected in the recent better-than-expected existing and new home sales purchase data,” says Len Kiefer, Freddie Mac’s deputy chief economist.

Source: Freddie Mac

Study: Multifamily Rental-Housing in for Shortage

By 2023, there could be up to 4.7 million more renter households due to demographic forces, according to Harvard University’s report, The State of the Nation’s Housing 2014. But the supply of multifamily rental housing will likely be far less than demand, writes David Brickman, Freddie Mac’s executive vice president for multifamily business.

“New construction by itself won’t fill the gap,” Brickman notes. “Additional investment needs to be made in existing units to keep them in active inventory. As part of this, there is a growing need to direct ‘flexible’ capital into renovating, preserving, and, in some cases, transforming the nation’s aging rental housing stock.”

Rental demand is rising due to younger generations who want to rent as they start their careers, those who face certain financial situations, and more interest in urban living, which will lead to higher rates of renters.

While multifamily construction has risen in recent years to try to meet the increase in demand, Brickman says it won’t be enough at the current pace, even with about 3.1 million new units expected over the next 10 years. Meanwhile, the existing rental housing stock is aging. Nearly 60 percent of U.S. rental properties with 20 or more units were built prior to 1980, according to the Census Bureau’s 2012 American Community Survey. About 6 percent of all units are “retired” each year, according to the survey.

Brickman says by some estimates, the supply already could be 1.5 million apartments short.  “Low vacancy rates have sped up rent growth faster than inflation and income growth,” he notes. “Add to that stagnant or falling wages, and the result is that more than half of all renters live in apartments considered unaffordable to them today. That is, they spend more than 30 percent of household income on rent and tenant-paid utilities.”

Source: Freddie Mac

Fannie Mae Releases ‘2014 National Housing Survey Results’

Americans’ concerns about the direction of the economy and their household income appear to be weighing on housing growth, according to results from Fannie Mae’s May 2014 National Housing Survey. The share of respondents who believe the economy is headed in the wrong direction remained at 57 percent last month, and those who said their household income is significantly higher than it was at the same time last year decreased four percentage points to 21 percent.

Although respondents’ attitudes toward housing have been generally positive during the past few months, their reluctance to enter the home buying or selling market has restrained activity below typical seasonal trends.

U.S. Census, HUD release “American Housing Survey”

The U.S. Census Bureau and HUD recently released the 2011 American Housing Survey, a biennual comprehensive national housing survey that provides data on housing inventories, demographics, home improvements, mortgages, and more.

The 2011 survey indicates that almost 20 percent of new home owners chose their neighborhood based on convenience to the workplace. 

The poll of the nation’s 115 million occupied homes also reveals the median size of single-family detached and mobile residences to be 1,800 square feet — versus 2,200 square feet for newly built homes — and the median year of construction for owner-occupied units to be 1976. 

Sixty-four percent of homes have three or more bedrooms and 52 % have two or more bathrooms. In terms of accessibility, 64 % have floors with no steps between rooms, 48 % have entry-level bathrooms, and 36 % have entry-level bedrooms. 

The survey also found that 20 % of recent movers located their current homes through a real estate agent, 17 % through Realtor.com, and 16 % by word-of-mouth. Additionally, households spend about 24% of their household income on housing.

This data and more is now available for the first time through the U.S. Census Bureau’s American FactFinder data access tool. Please review data and provide your comments!

Source: “HUD and Census Bureau Expand Access to Include Housing Info” National Mortgage Professional (01/04/13)

Household Income Posts Big Drops

The recession officially ended in June 2009, but the big dent to most households’ pocketbook didn’t happen until the years following it, according to a new study. 

Household income has posted some of its biggest drops in the last two years, moreso than during the recession itself, according to the study by two former Census Bureau officials. 

From June 2009 to June 2011, median household income dropped 6.7 percent to $49,909. Yet, during the recession (December 2007 to June 2009), household income fell only 3.2 percent. 

In total, household income has dropped 9.8 percent since the start of recession to June of 2011 — the largest drop in decades.  

There has been “a significant reduction in the American standard of living,” wrote Gordon W. Green Jr., who wrote the report. 

Since the recession and beyond, the number of unemployed persons has risen and the hourly pay of employed people has not kept up with the pace of inflation, the authors note. 

Source: “Recession Officially Over, U.S. Incomes Kept Falling,” The New York Times (Oct. 9, 2011)

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