Housing remains very much in demand, said Vice President of Demographics and Behavioral Insights at the National Association of Realtors® Dr. Jessica Lautz.
Mortgage rates aren’t the only thing at historic lows. Housing supply is close to historic lows last seen in 1982, Lautz said, noting that there is buyer fatigue. “People really can’t find homes. But it does seem like there are more buyers who are successfully entering the housing market. There is a lot of buyer pressure.”
There has also been an increase in all-cash offers, amounting for nearly 25% of all transactions. “A lot of people are buying second homes or investment properties because of low interest rates,” said Lautz. However, this is making it challenging for first-time buyers to compete. The amount of first-time buyers has hit a 33-year low, representing just 31% of all buyers, said Lautz. Of first-time buyers, 52% are a married couple, 19% are single females, 16% are an unmarried couple and 11% are single males.
Month to month, there has been home price increases for more than 110 months. Inventory remains a struggle due to land, laws, labor and supplies, said Lautz. Additionally, people are staying in their homes much longer than in the past. In 1987, the average tenure was six years and now it’s 10.
However, there could be relief, said Lautz, with the vaccine rollout, possible sales, housing starts and repurposing hotel and motel space for residential purposes.
Today, millennials represent the biggest generation who are buying, followed by baby boomers. But there has been a shift in what people are looking for. One-sixth of buyers during COVID-19 bought a multigenerational home. Forty-nine percent did so due to aging parents, while 33% did it for financial reasons and 30% did so for adult kids.