The U.S. housing market looks drastically different than it did before the pandemic, creating numerous challenges for prospective homebuyers.
The median sales price of a home skyrocketed from $329,000 in the first quarter of 2020 to $467,700 in the last quarter of 2022 amid red-hot demand. Typical mortgage rates more than doubled over the course of 2022, and today rates sit at their highest levels since the Great Recession. And while increased prices and high interest rates have discouraged demand as of late, the U.S. housing supply is inadequate for the current population and anticipated growth. This issue–which predated the pandemic–will continue to create competition and spur rising prices in the market.
And adding to all these challenges are the dynamics between different generations in the U.S. population, including older owners and homebuyers.
The aging of the Baby Boomer generation—defined as those born between 1946 and 1964—has driven the share of the U.S. population age 55 and older upward in recent years, from 24.1% in 2010 to 28.9% in 2021. This older segment of the population owns 57% of household real estate wealth in the U.S. as of Q4 2022. And more so than previous generations, older Americans are increasingly choosing to age in place, which means that fewer existing homes will end up on the market.
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