The Housing Market and Home Ownership

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With home prices up more than 50%, some states try to contain property taxes Rising home values have led to higher real estate taxes around the U.S. Now, many states are looking to provide relief to frustrated residents — and they are gaining momentum. Read more.

Why this matters: The rise of single-family home prices means higher tax bills for homeowners when governments don’t offset higher real estate values by reducing tax rates. And with offices seeing higher vacancies as people still work from home after the coronavirus pandemic, some commercial property values are declining, putting even more pressure on residential properties to deliver revenues.   Regulation is on its way in many states. New laws enacted in Alabama, Colorado and Wyoming will limit the growth in tax-assessed values for homeowners. A Kansas special session on tax cuts is expected to start June 18 and Nebraska also could hold a special session on property taxes. Proposals to curb property taxes also will appear on ballots this year in Colorado and Georgia.   But any relief carries consequences. Limits on the growth of assessed property values may provide a greater benefit to the wealthy. Exemptions for homes used as primary residences can shift a greater tax burden to rental properties and businesses.

RELATED COVERAGE ➤ Spending on home renovations slows, but high remodeling costs mean little relief in sight for buyers   IRS makes free tax return program permanent and asks all states to join in 2025   Mortgage rates snap three-week pullback, pushing average rate on a 30-year home loan back above 7%

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📬 Your outlook on homeownership

By Brianna Crane and Sami Sparber

Illustration: Sarah Grillo/Axios

Heads up — we're writing about Gen Z's homeownership aspirations. Zoomers, what's your take on renting versus buying? Are you saving up for a down payment? Homeowners, what's your advice for first-timers? Email realestate@axios.com or hit reply with your name and neighborhood. We may feature your insights in an upcoming newsletter.

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Black woman’s bid to buy Virginia Beach home faces illegal barrier, echoes of the past

People who overstate the racial progress America has witnessed over the past several decades need to be reminded, ever so often, of the discrimination that still lurks in housing, education, employment and the like.

https://virginiamercury.com/2024/06/06/black-womans-bid-to-buy-virginia-beach-home-faces-illegal-barrier-echoes-of-the-past/?

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Inside Gen Z's mind

By Brianna Crane and Sami Sparber

Illustration: Maura Losch/Axios

Steep housing costs are putting Gen Z's homeownership dreams on hold. The big picture: Gen Zers, roughly those aged 12-27, feel deeply pessimistic about the world around them, Axios' Erica Pandey reports. For this newsletter, we're focusing on the adult cohort. What they're saying: Homeownership is no longer a hypothetical idea, but figuring out how to get there is a challenge, D.C. renter Sheila Cruz-Morales tells us. Zoom in: The 23-year-old immigration activist immigrated to the U.S. two decades ago and dreams of buying a home for her parents first, and eventually herself, to create a sense of stability and safety. Yes, but: Gen Zers are a determined bunch, Cruz-Morales says. She's confident she'll find a way to buy a home one day, which could be more doable with a sibling or future partner. Of note: The DMV has a handful of programs to help first-time homebuyers — some are specifically for low-income folks, but others have higher thresholds. State of play: Many younger adults are struggling to swing pricey rents and returning to their childhood bedrooms or basements. Others are splitting the bill with roommates. Over half of U.S. adult men (57%) and women (55%) under 25 lived in their parents' home in 2022, an arrangement that's become more common in the past several decades, new census data shows. The latest: Fewer than one in five adult Gen Zers (18%) either own a home or are married to someone who does, according to a recent analysis by John Burns Research and Consulting. We caught up with the firm's chief demographer, Chris Porter, about Gen Z and how the cohort is shaping the real estate industry. This interview has been lightly edited. Does Gen Z care about becoming homeowners? Our research shows the majority of young adults still hope and expect to own a home. At this stage in their lives, homeownership seems less important, because it feels so far out of reach. The cost of getting into your first home is so much more expensive than it has been historically. People are getting married and having kids later in life, so it follows that they're maybe putting homeownership off a little longer. We also see some waiting because they want to save up for something nicer down the road. Go deeper: What's driving the disconnect?   Who's taking out mortgages By Brianna Crane and Sami Sparber   Data: Redfin; Chart: Axios Visuals Roughly one in three mortgages issued in the DMV last year went to Gen Zers and young millennials, a share that's held steady from 2018, according to a recent Redfin report. Between the lines: Younger people have remained the most common U.S. mortgage borrowers over the past five years, partly because they're more likely to take out home loans rather than pay in cash, researchers found. Yes, but: Many are using family money for down payments. More than a third of Gen Zers and millennials who plan to buy a home soon say they expect a cash gift from family, per Redfin.   Who's taking out mortgages By Sami Sparber   Data: Redfin; Chart: Axios Visuals Roughly 2 in 5 new mortgages issued in Texas' largest metro areas last year went to Gen Zers and young millennials, according to a recent Redfin report. Between the lines: Younger people have remained the most common U.S. mortgage borrowers over the past five years, partly because they're more likely to take out home loans rather than pay in cash, researchers found. Yes, but: Many are using family money for down payments. More than a third of Gen Zers and millennials who plan to buy a home soon say they expect a cash gift from family, per Redfin. State of play: Texas home prices have mellowed in recent years but are still nearly 37% higher than they were at the start of COVID disruptions, per the Texas Real Estate Research Center at Texas A&M University.

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🏘️ Gen Z's dashed homeownership dreams

Illustration: Shoshana Gordon/Axios

Steep housing costs are putting Gen Z's homeownership dreams on hold, Axios' Sami Sparber writes. The big picture: Fewer than 1 in 5 adult Gen Zers (18%) either own a home or are married to someone who does, according to a recent analysis by John Burns Research and Consulting. That's just under the homeownership rate for millennials when they were the same age. And it's well below the close to 33% of boomers who owned homes or were married to homeowners when they were Gen Z's age. "There's nothing left to put away for a down payment" after shelling out for rent and other bills, and saving for retirement, Minneapolis renter Jaylen Santos, 23, tells Axios.

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🏠 Housing market cools

By Naheed Rajwani-Dharsi and Brianna Crane

Illustration: Annelise Capossela/Axios Dallas-Fort Worth's housing market is cooling faster than the national average, according to a Redfin analysis. Why it matters: With fewer people competing, homebuyers might find it easier to avoid paying more than the asking price. The big picture: Florida and Texas may be hotter than ever, but their housing markets are cooling quicker than most other regions, Redfin says. State of play: New home construction, unaffordable home insurance and intense natural disaster threats contribute to increased supply and lower demand. Homes aren't moving off the market as quickly, and a growing share of sellers are lowering their asking prices — all signs these markets are cooling. Zoom in: Between April 2019 and April 2024, North Texas saw a 5.6% decrease in the share of homes sold within two weeks. Nationally, the drop was 3.9%. Meanwhile: Supply issues continue to put pressure on home prices across the U.S., despite mortgage rates dampening demand.

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The US housing slump deepened this spring. Where does that leave home shoppers and sellers? The housing market shows few signs of busting out of its three-year funk after a disappointing spring season and amid a gloomy outlook for the summer and fall. Read more.

Why this matters: Home shoppers came into 2024 with optimism that mortgage rates would ease further after a decline late last year. But those hopes faded as stronger-than-expected data on inflation and the economy clouded the timing of a possible rate cut by the Federal Reserve.   On average, more than one-third of all homes sold in a given year are purchased between March and June. This is known as the spring homebuying season, and it’s been a disappointment in recent years. That, plus record-high home prices, forced many would-be homebuyers to put their house hunt on hold.   Economists are projecting mortgage rates will ease modestly by the end of this year. But a small decline in rates may not be enough to entice home shoppers and persuade homeowners it’s a good time to sell.

RELATED COVERAGE ➤ Powell stresses that the US job market is cooling, a possible signal of coming rate cut   Is inflation still cooling? Thursday’s report on June prices will provide clues   Tiny homes, built largely with philanthropic support, offer more of a patch than a solution to homelessness

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📈 Luxury home sales skyrocket

Illustration: Natalie Peeples/Axios

The DMV's luxury real estate market is booming, and it's dominating the mid-Atlantic, per a recent report from Bright MLS. Why it matters: Higher-income buyers are less burdened by steadily high interest rates and D.C.'s expensive prices. The big picture: The number of luxury home sales around Washington jumped 60% last quarter, compared to the beginning of the year. And more are going for above listing price: 41% last quarter — up from 33% at the year's start. State of play: The greater D.C. region is home to eight of the 10 mid-Atlantic ZIP codes that saw the most luxury sales last quarter, says the report. McLean came in at the top spot, with 75 lux sales. Bethesda, the District, and Virginia's Haymarket came in at number three, four, and five, respectively. (Number two was Princeton, N.J.) And the top five most expensive mid-Atlantic luxury home sales last quarter all took place around the DMV. Top of the list: This 2,000-acre estate in Hume, Va., that went for $18.8 million in April. All-cash offers!

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🏡 Charted: Cheaper new homes

Data: Zillow. Chart: Axios Visuals New U.S. homes are now cheaper per square foot than old ones, Axios' Sami Sparber writes from a Zillow report. Why it matters: People typically pay a premium for brand-new houses. But in this brutal home market, some are finding deals. 🔭 The big picture: With elevated interest rates hammering housing affordability, many builders are shrinking homes to cut costs or offering incentives, including lower rates on mortgages. Keep reading.

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Chart du jour: 🏡 New home prices

By Mimi Montgomery and Sami Sparber

Data: Zillow. Chart: Axios Visuals New DMV homes are selling for $48.10 less per square foot than old ones, according to a recent Zillow report. Why it matters: People typically pay a premium for brand-new houses, but in this brutal home market, some are finding deals in new construction. The big picture: With elevated interest rates hammering housing affordability, many builders are shrinking homes to cut costs or offering incentives, including lower rates on mortgages. Go deeper.

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Easing borrowing costs

Illustration: Lindsey Bailey/Axios

Lower mortgage rates could bring hotter home competition. If you're jumping into the market, how's the house hunt going? For those with steep mortgage rates, are you planning to refinance? If you're still sitting tight, tell us where you're dreaming of moving and why. Email realestate@axios.com with your name and neighborhood or hit reply. We may feature your insights in an upcoming newsletter.

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Housing affordability

The housing market is finally showing signs of improvement, but homebuyers aren’t the only ones who have felt the sting. A recent report shows a dire situation for renters, too. Good luck living comfortably in these cities, which are listed as the five most rent-burdened places in America.

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🚚 Boomers keep big homes

Illustration: Sarah Grillo/Axios

Empty nesters increasingly are lingering in their family-sized homes, making it tougher for millennials to trade up. Why it matters: Baby boomers with empty nests own 28% of America's homes with 3+ bedrooms, while millennials with kids own just 14%, Axios' Sami Sparber writes from Redfin data. Between the lines: The problem for younger families is baby boomers don't have much motivation to sell. Many older people are on fixed incomes. So those who own homes are often staying put because they're mortgage-free or have a low interest rate. Most boomers are in their 60s, and are "still young enough that they can take care of themselves and their home without help," Redfin senior economist Sheharyar Bokhari writes. Purging or packing decades of belongings can be overwhelming. 🧳 The other side: extreme downsizing! No home, no lease, no storage unit, no problem for Gary and Judy Kelly, who have been traveling the world since early last year. Everything the couple owns fits in two suitcases and two carry-ons. "The anxiety of giving away a lifetime of stuff was tempered by the anticipation of the adventure," Gary Kelly tells Axios.

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Why our new builds are cheaper than old homes

By Kate Murphy

Condos, apartments and single family homes in Pacific Beach near Mission Bay. Photo: Kevin Carter/Getty Images

Home shoppers could get a better deal buying new than used around San Diego, according to a recent Zillow report. Why it matters: People typically pay a premium for brand-new houses, but in San Diego, location is king and existing homes are on the most desirable land. By the numbers: New homes in San Diego County are selling for $552 per square foot, compared to $609 for existing homes, per the report. That $57 discount is the largest among major U.S. metros. Land value is the biggest factor contributing to that difference, according to local real estate analyst Gary London. Between the lines: Existing homes tend to be closer to the high-cost, highly-desired coastal areas, whereas new homes tend to be built further east and south. A new, 3,000-foot home in La Jolla would be worth three times more than the same new house built in El Cajon, London said. Coastal communities are mostly built up already, so new homes are less common there. The exceptions: some infill development with townhomes and higher-density housing, or homes that are torn down and rebuilt. Most new builds are in more affordable places like Chula Vista, Otay, or inland Oceanside and San Marcos, he said. Data: Zillow; Note: Includes single-family homes, townhomes and condos; Chart: Axios Visuals Reality check: There's not a lot of new housing being built at all around San Diego, according to London. The city issued more permits last year than it has in decades, but it's still not enough to keep up with demand. Low inventory is keeping prices high. Zoom out: Home buyers are seeing these discounts in 21 major U.S. metros, led by San Diego, Salt Lake City and Los Angeles, per Zillow. The big picture: With elevated interest rates hammering housing affordability, many builders are shrinking homes to cut costs or offering incentives, including lower rates on mortgages, Axios' Sami Sparber reports. The average 30-year fixed mortgage rate has fallen lately, reaching 6.47% last week, according to Freddie Mac. The bottom line: In San Diego, "new builds are in inland areas and existing homes' resale reflect the fact that they're better locations closer to the coast," London said.

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Housing market

 

Mortgage rates fell this week to the lowest point since February 2023 — a welcome sign for Americans grappling with a tough housing market. The standard, 30-year fixed-rate mortgage averaged 6.20% in the week ended September 12, mortgage financing giant Freddie Mac said Thursday. That’s well below the two-decade high of 7.79% in October 2023. But even with borrowing costs heading lower, the US housing market is still unaffordable for millions of home seekers, particularly those with low incomes. Renters across America are also struggling, especially in urban population centers such as New York City, Los Angeles and the Miami metropolitan area, according to a recent Moody's report. Renters in those areas dish out more than 30% of their income toward rent, the report said.

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🏠 Chart du jour: Mortgage rate falls

Data: Freddie Mac. Chart: Axios Visuals U.S. mortgage rates are at lows not seen since early 2023, ahead of next week's expected interest rate cut. Why it matters: Easing mortgage rates offer house-hunters some relief. But experts say it's going to take a bigger drop to revive the sluggish home market, Axios' Sami Sparber and Brianna Crane write. Go deeper.

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Creative down payments

Illustration: Sarah Grillo/Axios

People who want to buy a house — and developers who want to sell houses — are trying to get creative to make deals happen. 💍 Newlyweds are increasingly asking friends and family to contribute to a down payment in lieu of traditional wedding gifts, the N.Y. Times reports (gift link). The number of couples including a house fund in their registry is up 62% since 2018, The Times reports, citing data from wedding website The Knot. Another survey found that many couples are also "registering" for help with other expensive parts of life, including fertility treatments and paying down student loans. 🏦 Between the lines: Many buyers weren't willing to sell while mortgage rates were at their peak. That's part of the reason newly constructed homes have sold considerably better than existing homes over the past few years. Developers reinforced that edge by offering mortgage products that shaved a few percentage points off of buyers' rates — and hundreds of dollars off their monthly payments. 🚜 But as rates begin to come down, developers likely won't get as much juice out of that kind of incentive, The Wall Street Journal reports (gift link).

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🏦 Bank of Mom and Dad

Illustration: Lindsey Bailey/Axios

Parents tell Axios they're still helping their kids pay for new houses. By the numbers: As housing costs soar, 26% of younger people who recently bought homes say they used family cash for down payments, up from 23% last year, Axios' Sami Sparber writes from Redfin research. Parents have maxed out annual gift tax limits or lent their children money to win bidding wars. Deb Sen of St. Paul tells Axios she's giving her married son money each year to help him and his partner purchase a property in Chicago. Even so, she expects it will take the couple around three years to afford a down payment. 🥊 Reality check: Those "who don't have family money are often shut out of homeownership," Redfin chief economist Daryl Fairweather said in a research report. This could widen the homeownership gap between Black and white families, an Urban Institute analysis notes.

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No, Zillow CEO didn't say Trump's deportation plan would help housing costs | Fact check

The claim: Zillow CEO said on CNBC that Trump's mass deportation plan will help with housing affordability

"BREAKING: Zillow CEO just said on CNBC Trump’s deportation plan will help with housing affordability," reads text within the post, which was originally shared on X, formerly Twitter.

Our rating: False

The CEO didn't say anything about mass deportation helping with housing costs. He said the availability and affordability of homes need to change to improve the housing market.

https://www.usatoday.com/story/news/factcheck/2024/11/16/post-misrepresents-zillow-ceos-cnbc-interview-fact-check/76331927007/?

ps:Of course the Post would misrepresent what the CEO said!! Because that's what they do!!!!!

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🏠 House hunting gets political

Screenshot: Oyssey A new real estate platform gives buyers easy access to the political affiliations of their future neighbors, Axios Miami's Martin Vassolo writes. Why it matters: Tech startup Oyssey is betting that social data — including age, education and income demographics — is influencing buyers more than the physical conditions of a home. The platform — soft-launching this month in South Florida and New York City — gives users block-by-block consumer and political data pulled from election results, campaign contributions and commercial data. Keep reading ...

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🏘️ More million-dollar homes

Data: Redfin. Chart: Axios Visuals Homes listed over $1 million are taking up a larger share of the market, Axios' Brianna Crane writes from Redfin data. Zoom out: U.S. median home prices have nearly doubled over the last decade.

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The Homeowners’ Rebellion

Wall Street landlords face a heartland backlash that could set off a revolution.

https://www.levernews.com/the-homeowners-rebellion/

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🏡 30-year mortgages hit 6-month high

Data: Freddie Mac via FRED. Chart: Axios Visuals The rate on the 30-year mortgage is hovering close to 7%, a nearly 6-month high, Axios' Emily Peck writes from Freddie Mac data. Though home sales picked up in the third quarter despite rising rates, they're still hovering at historic lows. Why it matters: Higher rates are putting home buying out of reach for many Americans, and simply turning others off from the market. 🔮 What's next: Most forecasts see mortgage rates declining a smidge in 2025 to 6-6.5% — probably not enough to jolt the slumping real estate market.

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🏠 Housing market winners

Data: Zillow. Table: Axios Visuals Hartford, Conn., and Richmond, Va., are two rising stars to watch in 2025. Sellers there have the upper hand as homes fly off the market at record speed, Axios' Brianna Crane writes from Zillow's latest forecast. Zillow's annual ranking predicts the most competitive housing markets for buyers. Markets at the top of the list are largely "starved for housing inventory" and tend to be relatively affordable with strong job and wage growth. ❄️ Buffalo nabbed the No. 1 spot for the second year in a row. San Francisco fell from 30th to 49th. Keep reading.

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🏡 Mayors: We need more housing

Illustration: Maura Losch/Axios

Mayors across the country are warning of a severe and worsening housing shortfall, Axios' Sareen Habeshian reports from a new survey by the U.S. Conference of Mayors, with the American Institute of Architects. 89% of the mayors surveyed said the federal government should provide flexible and direct funding for cities to address housing shortages. The mayors want more low-income housing credits and housing vouchers. ⚡️ The big picture: There aren't enough homes in the U.S. to keep up with demand. Some estimates put the total housing shortage in the millions of units. The U.S. Conference of Mayors, which opens its 93rd Winter Meeting in Washington today — with 270+ mayors in town — sees housing as a "national crisis [that] calls for a national response." Read the 20-page report ...