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What’s the most reasonable investment to make in life? Most of you may say that buying a house might be one of your best decisions.
And perhaps it’s true, as many of us long for a place we can call home.
Before we step into the enchanted world of homeownership, here are a few real estate market statistics to keep in mind.
Mind-Blowing Real Estate Market Statistics (Editor’s Choice)
- The US real estate market registered a 5.2% decrease in the sales of pending homes month-over-month.
- The US House Price Index for March 2023 showed a 0.2% increase in January 2023 from December 2022.
- The annual change in house prices from January 2022 to January 2023 was 5.3%.
- Baby Boomers comprised the most significant home buyer generation at 39%.
- The average home price as of April 2023 is $430,000
- Single female homebuyers represent 17% of the home-buying market in the States
- The average 30-year fixed-mortgage rate in the US for May 2023 is 6.52%
- 17% of home buyers were single females, while 9% were single males.
Real Estate Market History for 2023
It’s interesting to note that today, many people under 35 are purchasing their first home.
Before discussing how millennials buy houses, why not look at these historic real estate market statistics first?
1. In 1917, the American government started the initiative “Own Your Own Home.”
In 1917, the National Association of Real Estate Boards began promoting the idea that every American needs to invest in a home.
The US Department of Labor picked up the campaign later on. Then, the focus shifted toward a topic already engaging people's minds. It addressed how they could afford to buy their own home.
Up until 1934, Americans were primarily a nation of renters. The Great Depression shook most of the population, and they couldn’t afford a house. Most citizens in the USA lived in rental homes. Mortgages were constantly in default; by 1940, homeownership had dropped to 44%.
2. In 1934, the Federal Housing Administration (FHA) was created.
Before the Housing Administration, Americans were crushed by an unrealistic expectation to spend up to 50% of their down payment on their house and pay off the rest in no more than 10 years.
The purpose of the FHA was to provide lenders with insurance for home mortgages so they could offer buyers better deals, and it worked.
After the FHA started operating, mortgages turned into long-term loans that covered up to 80% of the cost of the real estate.
The Trap of Affordable Housing Loans
Fast forward to the beginning of the 21st century, and a lot has changed. Jobs are not the same as they used to be, nor will they be in the future. Legislation, governmental support, and the economic situation were developed. Mortgages have become everyone’s new best friend. Interest rates were low and mortgages were very affordable - so people took advantage of that.
Subprime mortgages were especially tricky as they targeted borrowers with troublesome credit histories. People who could not afford to pay off their loans grew in number. Lending spun out of control and drove off a cliff into a housing crisis.
3. Baby Boomers comprised the largest homebuyer generation at 39% in 2022.
In 2022, baby boomers, both younger and older, were the largest generation of home buyers, with a 39% share. 61% of recent buyers were married couples, and 10% were unmarried couples. 17% and 9% were single females and males, respectively.
4. $14.7 billion was spent on housing stimulus programs.
The Obama Administration initiated the American Recovery and Reinvestment Act in 2009. This undoubtedly influenced the real estate market statistics. The bill was introduced to help deal with the consequences of the economic crisis.
Its main tasks were to save existing jobs, create new ones, and provide relief programs for those most affected by the crisis. After the recovery programs were implemented, the economy slowly started to recover.
5. West Virginia has the highest homeownership rate as of 2023.
(Orange County Register)
West Virginia will have the highest ownership rate in 2022, at 79%. Coming second is Wyoming at 75%, Minnesota at 75%, Maine at 75%, and Delaware at 75%. At 53.6%, New York has the lowest homeownership rate among states.
Despite the high ownership rate in West Virginia, the value of the homes is relatively low because a significant portion of them are mobile homes.
6. About 66% of Americans had a home in the first quarter of 2023.
The increasing percentage of house purchases didn’t seem to be affected by the accompanying rise in the price of housing, as the homeownership rate in the United States increased to 66% in the first quarter of 2023 from 65.90% in the fourth quarter of 2022.
Real Estate Market Statistics Today
According to some NAR statistics, the market has observed 95 months of continuous growth. If we look at the complete statistical history of the housing market, we’ll see this number marks a new record!
7. The average 30-year fixed mortgage rate in May 2023 was 6.52%.
While that may seem good for potential buyers, the increase in house prices still excludes many people who want to buy a house from the market. Despite that, NAR reports an increase in first-time house buyers during this period.
This information regarding the real estate market proves that most people still prioritize having their own home despite relatively high prices.
8. First-time house buyers will comprise 26% of all home buyers in 2022.
First-time buyers comprised just 26% of all buyers in 2022, down from 34% in 2021. 65% of first-time homebuyers are driven primarily by a desire to own their home. 66% of first-time homebuyers are white, 14% are Hispanic, 11% are Asian Americans, and 9% are black.
The study also indicated that younger generations are increasingly buying their first homes.
9. As of 2023, the average American family spent about $5,577 on housing.
That’s over 33% (or one-third) of the average household’s income. While this is still within the acceptable 30% mark, it is still a relatively large expense.
The average family spends $1,885 monthly on housing-related expenses, while $3,405 is spent on personal monthly expenses.
Home Price Index On the Rise
Housing market data confirms a rise in real estate prices in 2023. Factors such as demand growth and supply constraints have fueled the increase in property prices.
Here are the places with the most expensive and most affordable housing:
10. Hawaii has the most expensive houses as of 2023.
(Norada Real Estate)
Hawaii has the most expensive housing at $834,582 on the Zillow Home Value Index. Coming in second is California, with a Zillow home value index of $728,133. The District of Columbia is the third state with the most expensive houses, with a Zillow Home Value Index of $627,158.
Due to Hawaii's limited land availability, rents and home prices have increased significantly.
11. Mississippi has the most affordable housing costs in the US.
The cheapest houses in America can be found in the state of Mississippi. The cost of living index there is 83.3. Mississippi has the lowest average housing costs in the nation, at 33.7% below the national average.
The housing cost index, or house price index, indicates the changes in cost for residential homes compared to an average of 100. If the index is higher than 100, the price is higher than the national average.
Home Buying Statistics and Millenials.
Now, here's the exciting part. As asked earlier, here's to address whether millennials buy houses and how.
Let me dress down the excitement and talk numbers:
12. As of 2023, more than 28% of home purchases will be made by Millennials.
Housing market trends in 2020 show that this year will be dominated by buyers from the Millennial age group.
Generation X and the Baby Boomers currently account for 24% and 39% of purchases, respectively. That number is expected to decrease even further.
All the predictions made by real estate experts come as no surprise. Millennials are slowly coming to the age where their priorities shift. They now want to create families and buy their own homes.
Women Dominating Real Estate Market Stats
Those days were gone when more men invested in real estate than women.
The following statistics show a growing number of female homeowners.
13. As of 2023, 17% of the real estate market comprises single female buyers.
The statistics are talking about not only female but single female owners here.
The group is the second biggest after married couples. Usually, it contains females from the Baby Boomers or Silent Generation groups. The average age of a female homeowner is 54.
Real estate facts show that those women are usually caregivers. In 20% of cases, they have children under 18. 12% of the time, they purchase homes to care for their aging parents.
14. Louisiana has the highest homeownership rates for single women.
In Louisiana, 15.16% of homeowners are single females. Florida has the most significant gap in homeownership rates among single women and single men.
The only states where single males own a greater proportion of homes than single women are North Dakota and South Dakota. At the same time, Wyoming has the smallest gap in homeownership rates.
This statistic proves that women don’t need men to have a home they can call their own.
15. Foreclosures in 2022 were up by 72% compared to 2021.
(Norada Real Estate)
In 2019, a total of 493,066 cases of property foreclosure were filed. That’s 0.36% of all residential properties in the United States. It decreased by 70% from 2019 (143,955).
However, in 2022, a total of 42,854 properties were repossessed by lenders through foreclosures. That’s 0.36% of all residential properties in the United States. The number was up 67% from 2021.
One of the possible reasons why foreclosure cases were increasing was because of rising unemployment and other economic problems.
Real estate market statistics show that the demand for housing has steadily risen in recent years. The US real estate market has blossomed because of a stable economic situation, affordable loans, and personal priorities.
While we expected to be challenged with higher housing demand in 2023, certain developments have changed those expectations.
As of the time of writing this article, it is still being determined how it will change the predictions mentioned. We’ll keep you updated.
I'm a work in progress. An amateur thinker, fascinated by the human mind. Avid hammocks supporter. Hammocks for every home! One curious creature on a crusade against the comfort zone. Currently exploring the ever-changing virtual world. Oh, and in case you were wondering, the answer to the ultimate question of life, the universe, and everything is 42.
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