Matthew begins with information on the current home ownership rates and dives into the data regarding home buying and the younger generation. The ownership rate for millennials is increasing and the current rate of 38.5% is a share not seen since back in 2011. Gardner believes this number will continue to rise over the next several years. He also wouldn’t be surprised to see the younger generation shifting into home ownership in even faster rates due to the ability to work from home, allowing them to move out of expensive cities and move into more affordable markets where they can buy.
Younger buyers continue to account for a major share of total mortgage borrowing. In 2020, millennials and Gen Z borrowed over 1.3 trillion dollars to buy homes. That is over 35% of total new mortgage debt on a dollar basis!
Looking into ownership rate by ethnicity, the report below showed that the share of white households ticked up, but the ownership for black households, while it went up a little, is still well below where it should be. Gardner states that this is a long term, systemic issue that needs to be addressed. The ownership rate for black families in 2020, was 25% lower than for white families. Gardner is concerned and sincerely hopes overtime this discrepancy will be addressed.
Regarding the latest data on permits and starts, permits continue to grow significantly. Single family permits increased by 3.8% month over month and continue to come in 30% higher than we saw a year ago. There is a weakness in starts due to some very worried builders about increasing lumber and other construction material supply costs. Although, the number of homes under construction still continue to trend higher.
Looking into supply, the total inventory of homes is down 25.7% which is a new record low. Only 1.04 million homes are for sale, with only 1.9 months of supply. Even with this record low of inventory, the number of sales remain impressive.
Sales are up by 23.7% compared to a year ago, and there would have been even more sales if there was more inventory. Seventy one percent of homes are selling within the space of a month, and on average within 21 days.
The median sale price of homes is up 14.1% year over year. Homes for sale priced under $100,000 were down by 28% year over year and homes in the $500-750 range increased by 53% year over year. Sales of a million dollar plus homes were up 76.7% than a year ago and they accounted for 11% of all sales. Gardner says we should still expect to see home sales rise as more of the country opens up and the vaccine is more broadly distributed.