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Posted On Monday, 08 April 2024 14:45 Written by
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While U.S. home prices have come down from recent highs, they remain relatively steep. Despite this, homeownership rates have gone up in recent years.

More specifically, according to a LendingTree analysis of the latest housing data, the share of owner-occupied homes in the nation’s 50 largest metropolitan areas increased by 108 basis points from 2012 to 2022. In other words, our findings indicate that even though home values in some areas have more than doubled since 2012, more people have become homeowners.

  • As of 2022, almost 43.5 million of the 70.4 million occupied housing units in the nation’s 50 largest metros were owner-occupied. The overall homeownership rate across these metros is 61.72%.
  • Homeownership rates are highest in the Detroit, Minneapolis and Pittsburgh metros. The homeownership rates in these metros are 71.49%, 70.54% and 70.45%, respectively.
  • Homeownership rates are lowest in the Los Angeles, New York, and San Diego metros. At 47.94%, Los Angeles is the only metro among the 50 largest where the homeownership rate is lower than 50.00%. 
  • From 2012 to 2022, the homeownership rate rose by 108 basis points from 60.64% to 61.72%. That’s an increase of 6,155,379 owner-occupied housing units. 

You can check out our full report here: https://www.lendingtree.com/home/mortgage/homeownership-rates-study/

LendingTree's Senior Economist and report author, Jacob Channel, had this to say:

"In simplest terms, homeownership rates have gone up despite rising prices because low pandemic-era mortgage rates helped offset increased home values and incentivize homeownership. Remember that while home prices play a role in how feasible homebuying is, mortgage rates are often just as important. Over the coming years, homeownership rates may decline in some areas as the nation continues to adjust to our higher-rate housing market."

Posted On Sunday, 07 April 2024 07:23 Written by

Americans report skipping meals, working overtime, and delaying medical care to afford housing

Half of U.S. homeowners and renters (49.9%) sometimes, regularly or greatly struggle to afford their housing payments, according to a new report from Redfin (redfin.com), the technology-powered real estate brokerage. Many report making sacrifices to cover their housing costs.

The most common sacrifice was taking no or fewer vacations. More than one-third of homeowners and renters (34.5%) who struggle to afford housing indicated that they skipped vacations in the past year in order to afford their monthly costs.

But many people who struggle to afford housing made more serious sacrifices: 22% skipped meals and 20.7% worked extra hours at their job. A similar share (20.6%) sold belongings.

These responses are based on a Redfin-commissioned survey conducted by Qualtrics in February 2024. The nationally representative survey was fielded to roughly 3,000 U.S. homeowners and renters. Most of Redfin’s report focuses on the 1,494 respondents who indicated that they sometimes, regularly or greatly struggle to afford regular rent or mortgage payments.

More than one of every six people (17.9%) who struggle to afford housing borrowed money from friends/family, and 17.6% dipped into their retirement savings. Over one in seven (15.6%) delayed or skipped medical treatments.

“Housing has become so financially burdensome in America that some families can no longer afford other essentials, including food and medical care, and have been forced to make major sacrifices, work overtime and ask others for money so they can cover their monthly costs,” said Redfin Economics Research Lead Chen Zhao. “Fortunately, the country’s leaders are starting to pay attention, and homebuyers may get a reprieve in June if the Federal Reserve cuts interest rates, which would bring down the cost of getting a mortgage.”

Mortgage payments are near their all-time high due to rising prices and elevated mortgage rates: The median U.S. home sale price is up about 5% from a year ago, and mortgage rates are hovering around 7%, not far from the 23-year high of roughly 8% hit in October. The typical household earns roughly $30,000 less than it needs to afford the median-priced home, and rents are on the rise again.

14% of Millennials Dipped Into Retirement Savings to Afford Housing Payments

Nearly one of every seven millennials (13.5%) who struggle to afford their housing payments have dipped into retirement savings to cover their monthly costs.

Most millennials are not retired, but housing affordability has become so strained that some are resorting to outside-the-box strategies to cover expenses. Millennials are the largest adult generation, and many are aging into their homebuying years at a time when home prices and mortgage rates are high.

The income needed to afford a starter home is up 8% from a year ago, prompting some young buyers to use family money to cover their down payment.

Baby boomers who struggle to afford housing were most likely to dip into retirement funds, with over one-quarter (27.5%) saying they did so to cover housing expenses. That makes sense, as many baby boomers are already retired, and it’s common for retirees to put their retirement savings toward housing.

Roughly 1 in 6 (15.5%) Gen Xers who struggle to afford housing dipped into retirement savings to afford monthly housing costs. The share was lowest among Gen Z respondents (6.5%), many of whom don’t yet have retirement savings.

The IRS typically taxes people who make withdrawals from their retirement accounts before the age of 59.5, but makes an exception for qualified first-time homebuyers, who are allowed to borrow up to $10,000 tax free.

Broken down by race/ethnicity, white respondents who struggle to afford housing were most likely (20.7%) to use retirement savings to cover housing costs, followed by Asian/Pacific Islander respondents (14%), Hispanic/LatinX respondents (13.6%) and Black respondents (12.6%).

Black Respondents Most Likely Work Extra Hours to Afford Housing; Gen Zers Most Likely to Sell Belongings

While pressing pause on vacations was the most common sacrifice for respondents as a whole, it wasn’t the top answer choice for every demographic. People of color and younger generations often made more serious sacrifices.

For example, Black respondents who struggle to afford housing were most likely to say they worked extra hours (25.9%) to cover their monthly costs, while Hispanic respondents were most likely to say that they sold belongings (28.2%). Skipping vacations was the most common answer among Asian/Pacific Islander respondents (43.8%) and white respondents (39.6%).

Black millennials are half as likely to own homes as white millennials, according to a separate Redfin analysis, though the racial homeownership gap exists across every generation due to decades of racist policies and discrimination.

When it came to age groups, skipping vacations was the top choice for baby boomers (42.8%), Gen Xers (36.8%) and millennials (31.3%) who struggle to afford housing. But for Gen Zers, the most common sacrifices were working extra hours, selling belongings and skipping meals, all of which clocked in at roughly 27%.

White Respondents, Baby Boomers and Homeowners Most Likely to Afford Housing Easily

Of the roughly 2,995 people who took the survey, half (50.1%) said they can easily afford their regular rent or mortgage payments, and half (49.9%) said they sometimes, regularly or greatly struggle to do so.

But the results vary by demographic. For example, 54.5% of white respondents said they can easily afford their housing payments, compared with 37.8% of Hispanic/LatinX respondents, 46.6% of Black respondents and 47.4% of Asian/Pacific Islander respondents.

Baby boomers were most likely to say they easily afford housing payments (61.9%), followed by Gen Xers (48.7%), millennials (40.2%) and Gen Zers (26.9%).

And homeowners (59.9%) were roughly twice as likely as renters (30.8%) to indicate that they easily afford their housing payments.

To view the full report, including charts and a detailed methodology, please visit: https://www.redfin.com/news/homebuying-sacrifices-survey-2024

Posted On Sunday, 07 April 2024 06:45 Written by
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