That’s the national home ownership rate, as reported by the Census Bureau. HousingWire points out that 36% of Millennials own homes, versus 79.2% of those 65+. 72.7% of the non-Hispanic white population own homes, versus 46.6% of Hispanics and 42.1% of blacks. Zillow economist Aaron Terrazas is hopeful that having created enough rental housing to meet market demand, builders will now turn their attention to the for-sale market, thereby fueling continued growth in home ownership.
David Blitzer, S&P Dow Jones Indices managing director, points out that there’s been very little for-sale housing construction. Single family home starts averaged 632,000/year between 2010 and now, versus 698,000/year during the last financial crisis and 1.5 million/year between 2001-2006. Bill McBride at Calculated Risk puts home construction in context of the overall economy. The $272 billion Q4 spending was 1.4% of GDP, compared to the $238 billion home improvement spending, which was 1.2% of GDP. Bill also notes that the multi-family housing market has now softened for 9 consecutive quarters.
7.9% vs 20%
The National Association of Home Builders finds this curiosity: all-cash deals accounted for only 7.9% of new home purchases (as reported by the Census Bureau), versus 21% of existing home sales (says the National Association of Realtors). Two reasons: new homes cost a lot more ($321K median, versus 248K median for existing homes), and 15% of existing homes were purchased by investors.
According to Experian‘s fascinating State of Credit report, that’s the average credit score in Washington State. The national average is 675. 22.3% of Americans have 780+ credit scores, versus 19.8% five years ago. 21.2% have sub-600 scores, versus 26.9% in 2012.
Realtor Magazine reports that Home builder Lennar offered real estate start-up Opendoor $100 in debt financing. The two companies are testing a home trade-up program (“as you do with cars!”), whereby Opendoor’s software algorithm buys your old house on the spot, so that you can buy one of Lennar’s brand new houses.
HousingWire reports on Divvy Homes’ new twist on home financing. Pick out any house for sale and Divvy will buy it. You then put 2% down and pay a monthly rent, with the goal of building up 10% in equity over 3 years. At that point, you would have the option to buy out the remainder of the house with a mortgage.