The New Year is starting out strong with housing having regained just about all its value lost in the 2008 crash. According to Zillow’s data, the total value of the U.S. housing stock grew to $29.6 trillion, a record high. That’s a $1.6 trillion increase in home value appreciation. That’s good.
During 2016, renters paid about $478 billion toward their housing costs, an increase of some $17.7 billion over what they spent in 2015. That’s a whole lotta people paying rent. Of those renting, it seems that today’s Millennials are continuing to rent longer than prior generations (that’s not so good) although they still wish to become homeowners someday.
Some other interesting housing facts:
- Most homeowners in 2016 were college educated
- 75% of all residential purchases in 2016 were made by buyers with college degrees
- 71.9% of white Americans own their home
- 41.3% of black Americans own their home
- Overall, the homeownership rate is decreasing (that’s bad).
Forecasts are for home values to increase about 4.7% in 2017. The housing recovery is good news for some but bad for others.
As housing continues to recover with values and mortgage rates rising, some families may be priced out their dream of homeownership. Millennials may be putting off their quest to own a home a little longer. That could be ugly for lenders.
On the other hand, with values recovering some owners may be motivated to sell, sparking a new purchase market. Others may look to take some regained equity to pay off debt, like student loans, though the use of equity loans. Speculators may consider the investment in rental properties, as rents rise and the pool of potential renter’s increases.
Either way, a housing recovery is good news for consumers and lenders alike. It reflects a strengthening economy which is good for us all.
With that, should come more jobs with better wage growth. This provides opportunities for us all. You just need to know where to look and be ready to take advantage when they come along.
Happy Housing Recovery!