More First-Time Buyers Purchased Homes During the Pandemic |
Despite the highest home prices ever, fierce competition, and a nationwide housing shortage, more first-time buyers become homeowners during the COVID-19 pandemic.
The percentage of first-time buyers who successfully purchased properties rose to 34% of all buyers over the past year. That’s up from 31% last year, according to the National Association of Realtors® 2021 Profile of Home Buyers and Sellers. This is the 40th year the report has been conducted.
The report is based on an NAR survey of nearly 5,800 buyers who purchased homes between July 2020 and June 2021. Read more from Realtor.com.
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As Rents Climb Renters Missed Out on $51K in Equity This Year |
Rents have been surging. Since January of this year, the national median rent has climbed by 16.4%, according to the latest National Rent Report from Apartmentlist.com. Rents aren’t slowing down either as demand continues to remain high.
Meanwhile, renters may be missing out on gaining equity. The average homeowner gained about $51,500 in equity over the past year, according to CoreLogic.
Rent payments only cover the cost of shelter and the included amenities. “None of your monthly rent payments come back to you as an investment,” notes a recent article at the Keeping Current Matters blog. “That means, by renting this year, you likely paid more in rent than you did in the previous year, and you also missed out on the potential wealth gain of $51,500 you could have had by owning your own home.” Read more from NAR's Realtor Magazine.
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Home Selling Sentiment at Record High |
Consumer attitudes toward both buying and selling improved in October, although the number who feel it is a good time to buy a home remains at record lows. The increases helped Fannie Mae's Home Purchase Sentiment Index (HPSI) eke out a 1-point gain from its September level, rising to 75.5. This is 6.2 points lower than the index in October 2020.
The HPSI, is based on a subset of questions from Fannie Mae's National Housing Survey (NHS). The question regarding whether or not it is a good time to buy a home received positive responses from 30 percent of those surveyed for a net positive of -35 percent. This is 3 percentage points higher than in the September survey, but 60 points lower than a year ago. Read more from Mortgage News Daily.
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Homes Continue to Sell at Record Speeds |
Home buyers are still snatching up homes at a quick pace. Homes sold more quickly in October than in any October in recent history, according to realtor.com®’s Monthly Housing Report.
The typical home spent just 45 days on the market in October, reaching an eight-month streak of homes selling faster than in any month before 2021, realtor.com® says.
“The year may be winding down, but 2021’s feverish pace of home sales continues to hit new records,” says Danielle Hale, realtor.com®’s chief economist. “Despite returns to more typical pre-COVID seasonality which means a slower fall versus summer season, October housing data suggests that demand is still unseasonably high.” Read more from NAR's Realtor Magazine.
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Big Win for Homeowners: Americans Gained Significant Equity During the Pandemic |
Here’s some great news for homeowners: They’re home equity rich.
With housing prices reaching record highs, a large and growing share of homeowners owe far less than what their homes are worth on the market.
About 39.5% of homes with mortgages in the U.S. were equity rich in the third quarter of 2021, according to a recent report from real estate information firm ATTOM Data Solutions. That’s compared with just 28.3% of homes this time last year. This means that homeowners could sell their homes for at least twice the amount they owe on their mortgages.
“There is no doubt that homeowners continue benefiting big-time from the relentless home price increases we are seeing around the country,” says Todd Teta, chief product officer of ATTOM. Read more from Realtor.com.
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34% of Recent Movers Live In Single-Income Households, Up From 29% Before the Pandemic: Survey |
More than one-third (34%) of people who moved during the coronavirus pandemic live in a home where only one adult has a full-time job. By comparison, just 29% lived in a single-income household before the pandemic.
That’s according to an August 2021 Redfin survey of 1,023 U.S. residents who have moved to a new home since March 2020.
As the portion of people living in single-income households increased, the share living in dual-income households declined. Slightly more than half (58%) of the recent movers Redfin surveyed live in a home with two adults working a full-time job, down from 62% before the pandemic.
“While some people chose to move down to a single-income household, others had no choice,” Redfin Deputy Chief Economist Taylor Marr said. “Thousands of Americans lost their jobs during the pandemic, and scores of parents had to leave the workforce when daycares and schools shut down. Most workers are rethinking where their careers fall on life’s priority list.”
Remote work during the pandemic also enabled many families to relocate to more affordable places, where it’s often more feasible to live in a home with just one income. Read more from Redfin.
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Despite the re-acceleration of economic growth, the recent bond has kept interest rates low. These low mortgage rates, combined with the tailwind of first-time homebuyers entering the market, means that purchase demand will remain strong into next year. However, affordability pressures continue to be an ongoing concern for homebuyers. |
We hope you enjoyed this week's Market News. For more information about how PMA can help you, please contact us. |
Plymouth Meeting Office: 610.834.8700
Doylestown Office: 215.345.7600
Ocean City, NJ Office: 609.398.8600
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Information and analysis is obtained through third parties and is deemed accurate but not guaranteed. Philadelphia Mortgage Advisors is a licensed mortgage lender by the PA Dept. of Banking and Securities, NJ Dept. of Banking & Insurance, the state of DE, the Florida Office of Financial Regulation, MD Mortgage Lender #23004 and VA State Corporation Commission #MC - 6797. NMLS #128570. |
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