A Decade Later: Assessing the American Dream

first_imgSign up for DS News Daily The Great Recession ended 10-years ago in June. In a new blog, Odeta Kushi, Deputy Chief Economist, First American compared the housing market trends at that time with the current numbers to analyze how far the housing market has come over the past decade.For the analysis, Kushi studied the housing demand metrics, supply metrics, and homeownership metrics. These were scaled relative to their level at the end of the Great Recession.”Today’s housing market enjoys much stronger demand than a decade ago, but housing supply has slumped,” Kushi observed. “More house-buying power and expanded access to credit, along with a demographic tailwind from millennials aging into prime home-buying age, all bode well for housing market demand. The question is whether there are enough homes for sale to meet this surging demand.”She noted that affordability has improved since the end of the Great Recession largely due to lower mortgage rates and rising household income. In fact, mortgage rates in April were 1.3% lower than those in June 2009. At the same time, consumer housebuying power has increased by 54% over the past 10 years.Similarly, credit availability has improved by 30% over this period.As reported by MReport, in a recent episode of The Exchange on CNBC, Skylar Olsen, Economic Research Director, Zillow, had also observed that the fall of mortgage rates gives many “reason to believe” that the current coolness in the market wouldn’t last long.The challenge today, according to Kushi is the lack of supply. She noted that inventory turnover has declined by 16% since June 2009.”A major reason for the lack of homes for sale is increasing tenure–the length of time a homeowner lives in their home,” Kushi said. “In the years following the recession, tenure has rapidly increased and it is currently more than 11 years, compared to just under seven years at the end of the Great Recession.”While building new homes might seem like a natural solution to solve this issue, Kushi noted that for more than a decade, “home building has not kept up with the demand for shelter.””While housing starts, a leading indicator of new home completions, have doubled since the lows reached at the end of the recession, they remain 33% below their 2000 level,” she said.According to Olsen, slowing home value appreciation was also a concern. “Home value appreciation is slowing down fairly significantly in those expensive markets. The percentage of listings that have price cuts have shot up as the housing market starts to transition.” Olsen said. Previous: Better Data, Stronger Performance Next: The Week Ahead: Fed Chair in the Spotlight Data Provider Black Knight to Acquire Top of Mind 2 days ago A Decade Later: Assessing the American Dream Demand Propels Home Prices Upward 2 days ago Related Articles About Author: Radhika Ojha Demand Propels Home Prices Upward 2 days ago Radhika Ojha is an independent writer and copy-editor, and a reporter for DS News. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her masters degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha, also worked as Principal Correspondent at HT Media Ltd and at Honeywell as an executive in corporate communications. She and her husband currently reside in Houston, Texas. Share Save in Daily Dose, Featured, Market Studies, News Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Data Provider Black Knight to Acquire Top of Mind 2 days agocenter_img Tagged with: Demand First American Home home price appreciation HOUSING Supply Zillow Home / Daily Dose / A Decade Later: Assessing the American Dream The Best Markets For Residential Property Investors 2 days ago  Print This Post The Week Ahead: Nearing the Forbearance Exit 2 days ago Subscribe Governmental Measures Target Expanded Access to Affordable Housing 2 days ago Demand First American Home home price appreciation HOUSING Supply Zillow 2019-07-05 Radhika Ojha July 5, 2019 1,212 Views Servicers Navigate the Post-Pandemic World 2 days ago Servicers Navigate the Post-Pandemic World 2 days ago The Best Markets For Residential Property Investors 2 days agolast_img read more

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