The Housing Market and Home Ownership

[phkrause]

? Record housing squeeze

Data: Redfin. Chart: Axios Visuals You need to earn $117,000 a year to afford a median-priced U.S. home — a new high in data going back to 2012, Axios' Sami Sparber writes from a Redfin report. That's $33,000 more than the median household income in the U.S. — around $84,000. Read on.

[phkrause]

2024 US home sales hit lowest level in nearly 30 years with ownership increasingly out of reach

LOS ANGELES (AP) — The latest evidence that homeownership is becoming increasingly less accessible to many Americans: Sales of previously occupied U.S. homes fell last year to a nearly 30-year low for the second time in as many years.

https://apnews.com/article/housing-home-sales-real-estate-home-prices-b7645724538b7a860c1d739e8b05380d?

[phkrause]

Why this California family can’t buy a home despite earning $270K

The Petersen family’s two-bedroom apartment in northern California is starting to feel small.

https://apnews.com/article/first-time-home-buyer-housing-prices-8ede22e18fd11a40f45e2e0ba6c055c1?

[phkrause]

? Rising homeowner fees

Data: Realtor.com. Chart: Axios Visuals Some 40% of houses for sale in 2024 came with homeowners association fees — and those dues are rising, Axios' Sami Sparber writes from a Realtor.com report. Catch up quick: HOA dues typically cover maintenance and amenities like pools and gyms, plus other costs that keep a community running. They're common in areas full of condos, townhouses and newly built single-family homes. Friction point: HOAs often enforce strict rules on everything from holiday decor to lawn care, with fines for residents who fail to comply. America's median monthly HOA fee climbed from $110 to $125 in the last year, the report found.

[phkrause]

? Charted: COVID housing shock

Data: Redfin. Map: Axios Visuals Cheap borrowing costs and remote work unleashed a homebuying frenzy during the pandemic — and sent prices soaring, Axios' Sami Sparber writes. Why it matters: COVID — which shut America down five years ago this month — upended the country's housing market, delivering wins for homeowners and roadblocks for those still dreaming. ? By the numbers: The median U.S. home price in January was $418,000, up around 45% from $289,000 five years ago, according to Redfin. Go deeper: 5 ways COVID changed the market.

[phkrause]

How flood insurance became a bailout for Mar-a-Lago and vacation mansions. Lawmakers are facing a deadline to reauthorize the federal program providing insurance to homeowners when private insurers abandon their climate-battered locales. The 56-year-old program holds nearly five million policies and more than $22 billion in liabilities. It was envisioned as a stopgap measure for the working class — but the wealthy are now exploiting the program at the expense of low-income homeowners. That includes Trump’s Mar-a-Lago estate.

Low-income homeowners are subsidizing the rich. A 2020 study by the insurance consultancy Poulton Associates found that the program “provides a substantial subsidy to upper-income groups.” How? By charging lower-income households higher premiums than high-income households — even though the latter’s properties are generating far higher loss ratios (i.e. the difference between premiums paid in and claims paid out).

• Key finding: As flooding has become the most common and costly disaster in the era of climate chaos, the study found that “almost all of the excess (flood) losses are in the highest income segments” because “insufficient premium is collected from the higher income groups.” In other words, “Buyers that can most afford the premium are not paying their proper rate.”

Incentivizing rich people’s bad behavior. A decade ago, NBC News reported that the government “remapped waterfront properties from the highest-risk flood zone, saving the owners as much as 97 percent” on their premiums. The Poulton Associates report concluded that the program “continues to incentivize unsustainable development in low-lying areas where excessive losses are certain… while lower income homeowners pay higher rates and receive reduced benefits.”

Rand Paul’s standoff and an impending deadline. Facing the program’s March 14 expiration, lawmakers have been trying again to greenlight it with few reforms (despite federal auditors’ insolvency warnings). But Sen. Rand Paul (R-Ky.) recently gummed up the works with amendments barring the program from insuring second homes and placing a cap on eligible home values. “Is there some level of rich person’s mansion that maybe the average ordinary taxpayer should not have to subsidize their insurance?” Paul asked. If the program expires, low-income households could be left with few options, and conservatives could get a boost in their push for full privatization.

[phkrause]

? Gen Z hotspots

Data: CoreLogic. Chart: Axios Visuals Gen Z represented 13% of U.S. home mortgage applications in 2024, up from 10% in 2023, Axios' Sami Sparber writes from an analysis by CoreLogic, an industry data provider. Relatively affordable parts of the Midwest and South saw the highest Gen Z shares. Pricey coastal metros lagged behind.

[phkrause]

? When to sell

Data: Zillow. Graphic: Jacque Schrag/Axios U.S. homes listed late last May sold for 1.6% more — typically $5,600 — than any other time of year, Axios' Sami Sparber writes from a new Zillow report. The big picture: The best time to sell depends on where you live. Last year, it was as early as March in Austin and as late as November in Phoenix.

[phkrause]

? Red tape isn’t causing the housing crisis. Contrary to what “Abundance” elites claim, America’s affordable housing crisis isn’t a supply issue. The Federal Reserve found that constrained supply is “relatively unimportant” in explaining rising housing costs, which means construction limits aren’t the problem. More than 90 percent of Americans reside in counties where housing costs grew faster than incomes from 2000 to 2020. 

• Real estate groups backed by investment behemoths, including Berkshire Hathaway and Starwood Capital Group, spent over $402 million lobbying the government on housing policy between 2020 and 2022. Blackstone, the nation’s largest landlord, has spent millions lobbying against rent-control measures while gouging tenants and ramping up evictions.

[phkrause]

3D printed and factory-built homes could help tackle housing crisis

As Americans struggle under backbreaking rental prices, builders are turning to innovative ways to churn out more housing, from 3D printing to assembling homes in an indoor factory to using hemp — yes, the marijuana cousin — to make building blocks for walls. Read More.

[phkrause]

Signs of a more buyer-friendly housing market emerge for the spring homebuying season

This spring homebuying season is shaping up to be more favorable for home shoppers than it’s been in recent years — as long as they can afford to buy. Read More.

[phkrause]

? Homeownership rates rise

Data: National Association of Realtors analysis of 2023 ACS PUMS data. Chart: Axios Visuals More people of color have become homeowners over the past decade, but the racial gap persists, Axios' Sami Sparber writes from a National Association of Realtors report. Why it matters: Owning a house is how most people in America build wealth and pass it down to the next generation, By the numbers: The U.S. homeownership rate for Black households was around 45% in 2023, up from roughly 42% in 2013. It's still well below the rates for white households (72%), Asian households (63%) and Hispanic households (51%). Zoom in: Hispanic and Asian American households recorded the biggest jumps in homeownership rates, according to the report. That's partly due to rapid population growth, especially among younger people looking to buy homes, and increased economic stability, the authors note. Keep reading.

[phkrause]

Mortgage rates

With the arrival of spring, homeowners are making sure their properties offer good curb appeal. Those who are eager to buy are browsing real estate listings and lining up potential dates for open houses. But if buyers can’t afford to purchase a property in cash, they’ll need to keep an eye on mortgage rates — and this week, those rates jumped to the highest level in months. The average rate on a standard, 30-year fixed mortgage was 6.83% in the week ending April 17, up from 6.62% a week ago, mortgage financing provider Freddie Mac reported. That's the largest one-week jump in mortgage rates in nearly a year. Interest rates had been steadily falling until President Trump launched his sweeping tariff plan earlier this month, prompting an escalating trade war with China.

[phkrause]

? Huge drop in home sales

Data: National Association of Realtors. Chart: Axios Visuals The housing market is still in a major funk: Sales of existing homes fell by 5.9% in March, which is typically the beginning of the busiest home-buying season. That's the biggest one-month drop since 2022, and a sign that 2025 may be the third straight year of sluggish sales. ? Between the lines: Prices are high, interest rates are still at 6.8% and the economic volatility of the past few months has either wiped out some buyers' savings or scared them away from making a big move. Explore the data.

[phkrause]

? Home unaffordable home. Americans are struggling to make their mortgage payments, new data shows. A recent banking trade association survey found that mortgage delinquency rates have slowly increased after hitting lows in 2017 and 2022. At the end of last year, 11 percent of borrowers were past due on their payments. Nearly half of the most serious delinquencies were for loans issued since 2020.

[phkrause]

? Mapped: $1 million starter homes

Data: Zillow. (Starter homes are those in the bottom third of home values in a given area.) Map: Axios Visuals. There are now 233 U.S. cities where a typical starter home costs at least $1 million — nearly triple the number from March 2020, Axios' Sami Sparber writes from a Zillow report. Why it matters: It's a sharp reminder that homeownership is slipping further out of reach, especially for younger people. The median age of first-time buyers is pushing 40, the oldest on record.

[phkrause]

?️ No one's buying vacation homes

Data: Redfin. Chart: Axios Visuals Demand for second homes is at its lowest since at least 2018, Axios' Sami Sparber reports from new Redfin data. U.S. homebuyers took out around 86,600 mortgages for second homes last year, per Redfin's analysis. That's down 66% from the pandemic homebuying frenzy. ? State of play: Homeownership costs have soared, and cities are cracking down on short-term rentals. Plus, fewer people can work remotely from their beach house or ski chalet these days. Demand has particularly cratered in Florida as climate-related housing costs swell.

[phkrause]

? The new homebuyer's market

Data: Redfin. Chart: Axios Visuals It's a buyer's market in real estate — if you can afford it: There are nearly 500,000 more home sellers than buyers in the U.S. housing market, Axios' Sami Sparber and Emily Peck write from Redfin estimates. Why it matters: That's the widest gap on record — and a big reversal from just a few years ago, when home buyers were desperate to find a place to live, sending prices into the stratosphere. The big picture: The one-two punch of still-high home prices and high mortgage rates is making it hard for buyers, especially first-timers, to find a place they can afford. Add to that the extreme economic uncertainty of 2025. Tariff news and layoff fears are tamping down buyer demand. ? What to watch: Historically, when sellers outnumber buyers, prices drop. In some markets, prices have already started falling. Home prices fell in 11 of the top 50 most populous U.S. metro areas in the four weeks ended April 20. That includes Austin, Texas; Oakland, Calif.; and Tampa, Fla. Redfin believes prices will dip 1% by the end of the year (not exactly a huge sale, to be sure).

[phkrause]

? Homes get older

Data: Redfin analysis of MLS records. Chart: Axios Visuals The median U.S. home bought last year was 36 years old — the oldest since at least 2012, Axios' Sami Sparber writes from Redfin records. A major construction slowdown "has fast-tracked the aging of America's housing stock," the real estate site reports. The median age of homes sold in 2024 hit 69 in Buffalo, New York, the oldest among the metros analyzed. In Provo, Utah, it was 6. Keep reading.

[phkrause]

?‍♂️ 1 for the road: New pool math

Illustration: Brendan Lynch/Axios

The price premium for homes with pools is slipping back to pre-pandemic levels, Axios' Sami Sparber writes from Realtor.com data. Why it matters: Sellers banking on a big pool payoff might get a splash in the face. By the numbers: The typical asking price boost is now roughly 21% per square foot compared to homes without pools, down from a 26% peak in 2022. Keep reading.

[phkrause]

CHART OF THE DAY

 

“If you bought your house in 2019 — before the big spike in home prices and mortgage rates — you’re probably doing just fine.... If you bought a house after that, your housing costs probably are a lot more expensive relative to your income." (Source: Bloomberg / Morgan Stanley)

[phkrause]

? America's deep housing hole

Data: National Association of Realtors. Chart: Axios Visuals Even as the stock market approaches an all-time high, a big cloud hovers over the economy: the housing market, Axios' Emily Peck writes. Why it matters: Home sales are hovering at historic lows, as economic uncertainty and high mortgage rates hold back buying. The only other time over the past 20 years that pending home sales — deals that are in contract but not yet closed — have been this low was in 2020, when COVID briefly froze the real estate market. ? Zoom in: Other indicators are flashing red, too. Existing home sales fell year-over-year in May to their slowest pace since 2009 (when the market was in tatters during the financial crisis), according to the National Association of Realtors. Home prices are now rising at the slowest annual pace in two years. Housing starts, or new homes beginning construction, dropped nearly 10% in May, the weakest since May 2020 — a sign that home builders are losing confidence in the economy. The big picture: The real estate industry is reeling from news of ICE enforcement actions at home building sites, and tariffs raising the price of materials. Keep reading.

[phkrause]

Investors snap up growing share of US homes as traditional buyers struggle to afford one Nearly 27% of all homes sold in the first three months of the year were bought by investors – the highest share in at least five years, according to a report by real estate data provider BatchData. Read more.

Why this matters: The U.S. housing market has been in a sales slump since early 2022, when mortgage rates began to climb from pandemic-era lows. Home sales fell last year to their lowest level in nearly 30 years. They’ve remained sluggish so far this year, as many prospective homebuyers have been discouraged by elevated mortgage rates and home prices that have kept climbing, though more slowly.   Investor-owned homes account for roughly 20% of the nation’s 86 million single-family homes, according to BatchData. Of those, mom-and-pop investors, or those who own between 1 and 5 homes, account for 85% of all investor-owned residential properties, while those with between 6 and 10 properties account for 5%. Institutional investors that own 1,000 or more homes account for only about 2.2% of all investor-owned homes, the firm said.

RELATED COVERAGE ➤ Average long-term US mortgage rate falls to 6.67%, the lowest level since early April   Book Review: ‘There Is No Place For Us’ shines lights on a homeless population often ignored

[phkrause]

US home sales fade in June as national median sales price hits an all-time high of $435,300

LOS ANGELES (AP) — Sales of previously occupied U.S. homes slid in June to the slowest pace since last September as mortgage rates remained elevated and the national median sales price rose to an all-time high of $435,300.

https://apnews.com/article/housing-home-sales-real-estate-home-prices-64769d50ce9c16dee9ffb90c01735071?

[phkrause]

? Hottest housing markets

Data: Wall Street Journal and Realtor.com; Chart: Axios Visuals Looking to buy a home this summer? Check out mid-sized metro areas in the Midwest and Northeast. That's the big takeaway from the new WSJ/Realtor.com Housing Market Ranking, which combines quality of life factors with the likelihood of home value appreciation. ? Breaking it down: Manchester-Nashua, New Hampshire, tops the list. After that come a few more cities in New England and a whole bunch in the Midwest. "The Midwest's appeal and popularity in today's market is due to the region's housing affordability, low cost of living, and climate resiliency," the report notes. As for the Northeast, prices are higher but so is demand — particularly for more affordable cities like Manchester within striking distance of bigger ones, like Boston. ? The flipside: "Metros in Texas and Florida continue to dominate the bottom of the list as growing inventory thins out buyer demand and keeps homes on the market longer," the report notes. Another factor is "high risks of property damage due to climate events." ? State of play: The housing market overall is looking very slow this summer. With rates and prices stubbornly high, potential buyers are staying on the sidelines. See the list ...