A recent report by Core Logic examines the role and performance of the housing sector during the ongoing 121 months of consecutive economic expansion in the United States, the longest period on record. Here’s a look at the reports key findings.
The number of homes with negative equity has decreased
Total percent of homes underwater went from 25.9% in the first quarter of 2010 to 4.1% in the first quarter of 2019.
Total home equity hits new record
At the end of the first quarter of 2019, total home equity reached $15.8 trillion, up from $6.1 trillion in the first quarter of 2009.2 Between the first quarter of 2010 and the first quarter of 2019, the average equity per borrower increased from approximately $75,000 to approximately $171,000.
Since 2010, the housing flip rate has increased significantly
In the first quarter of 2018, the number of properties bought and sold again within a two-year period reached its highest point at 11.4%.
Strong recovery for home prices and rents
Since June 2009, home prices and rents have continued to grow. Through May 2019, home prices increased a cumulative 50% and single-family rents increased 33% in the United States. With home prices soaring after the recession, many first-time buyers delayed homeownership, choosing instead to rent for a longer period. However, in 2018, Millennial buyers, those born from 1981 to 1996, reversed this trend by becoming the largest cohort for home purchases, accounting for 44% of home-purchase mortgage applications. These Millennial buyers are looking for affordability and not buying in the typical coastal cities seen in the past, according to CoreLogic.
While home prices are still growing, they are doing so at a slower pace. According to the report, “Home prices increased just 3.6% year over year in May 2019, down from 4.1% in January. Additionally, housing starts in May 2019 underperformed, dropping 0.9% below the revised April estimate. Still, some signs are positive. The overall mortgage delinquency rate reached a record low in April 2019 at 3.6%. With mortgage rates currently at a two-year low, providing much needed improvement in mortgage affordability for prospective home buyers, the CoreLogic HPI Forecast expects a moderate 5.6% acceleration in annual home price growth from June 2019 to June 2020.”
With rent at an all time high, rates at an all time low, and home values expected to only moderately accelerate, it may be a good time to buy. If you’d like to know how much home you can afford, and what your monthly payments will be, fill out the form below. We offer no and low down payment options. This is not a mortgage application. There is no obligation and no cost.