Leadership Conversation – The U.S. Housing Crisis is Real
Leadership Conversation – The U.S. Housing Crisis is Real
The U.S. homeownership rate is under 64%, up slightly but still near the 40-year low of 63.4% posted in the 2Q of 2015. Homeownership is around the same level as in the 1Q of 1986. The number of starter homes for first-time buyers has declined by nearly 44% since 2012. “Flippers” now account for around 15% – 18% of existing home sales, and cash-only sales are now around 23% [January 2017] of transactions. The number of “trade-up” homes, according to Trulia, is down around 40% over the same period. For-sale home foot traffic is down to average levels. Millennials are the largest group of home buyers but lack the financial resources to purchase the “home of their choice” in the “location of their choice.” Existing home sales are around 5.4 million, with a median existing home price of approximately $245,000. Around 1.9 million existing homes are for sale. However, the jobs many Millennials want are in markets with unaffordable home prices. In 2016, the ratio of home prices to median income was around 4.0 – 4.2 times household income. The following table highlights the percent of households that can afford to buy a median-priced home in 2018.