Home prices in the U.S. have climbed at a record pace during the pandemic. The median home price reached over $363,000 in June 2021, a 23.4% increase from 2020. Many of the houses are being sold above their asking price, often entirely in cash with bidding wars becoming the new norm to weed out the competition. So is America currently in another housing bubble and what are the signs that can help investors predict an oncoming crash?
Demand for lumber has skyrocketed during the pandemic, sending prices to all-time highs. This video explains what’s driving the lumber boom, who’s profiting, and why those growing the trees aren’t reaping the benefits. Illustration: Liz Ornitz/WSJ
A.M. Edition for April 15. WSJ’s Konrad Putzier discusses global investment in the U.S. housing market. WSJ’s Anna Hirtenstein on the growth of luxury goods.
The Biden administration is set to punish Russia. Efforts to make band practice safe in the pandemic. Marc Stewart hosts.
We’re in the longest period of time since the minimum wage has been created that it hasn’t been adjusted. You’ve probably heard the progressive and Congressional Democrats argument for a $15 an hour federal minimum wage.
Now, some Republicans are responding with a proposal to raise it to $10 an hour by 2025. Plus, what we’re just learning about security around the Jan. 6 insurrection. And, how Home Depot is a proxy for the housing markets.
From a NRMLA online news release:
“Research suggests that as we age, Americans will spend more of our hard-earned retirement assets on health care, such as insurance, prescription drugs, in-home care and other services that help us remain independent,” says NRMLA’s President Steve Irwin. “A retirement plan that includes the responsible use of home equity may be the best option that can help ensure healthcare spending doesn’t become a financial burden for many retired couples.”
(December 17, 2019) – Homeowners 62 and older saw their housing wealth grow by 0.3 percent or $24 billion in the third quarter to a record $7.19 trillion from Q2 2019, the National Reverse Mortgage Lenders Association reported today in its quarterly release of the NRMLA/RiskSpan Reverse Mortgage Market Index.
The RMMI rose in Q3 2019 to 259.19, another all-time high since the index was first published in 2000. The increase in senior homeowners’ wealth was mainly driven by an estimated 0.5 percent or $40.7 billion increase in senior home values, offset by a one percent or $16.5 billion increase of senior-held mortgage debt.
From a Wall Street Journal online article:
The jewel-box home—small, but loaded with amenities and costly finishes—is luring more home buyers. An analysis by Home Innovation Research Labs, a subsidiary of the National Association of Home Builders, found that the number of new-construction luxury homes at 3,000 square feet or less has increased nearly 20% since 2013—with a corresponding decline in larger-size, high-price homes.
Changing demographics might be driving the trend. More than half of all households now consist of single people or couples, U.S. Census Bureau data shows—with traditional nuclear families accounting for just 20%.
“Empty-nesters want to downsize, but they want luxury homes not starter homes—luxury kitchens, marble surfaces, all the latest and greatest,” said Tim Costello, CEO of Builder Homesite, a consortium whose New Home Source website—an online clearing house for new-construction homes—tracks home buyers’ preferences.
From a Smart Cities Dive online opinion article;
The reality, however, is that modular, prefabricated housing can exceed the limitations put upon it by popular conceptions of trailer parks and postwar government housing. Not only are they certainly faster – an important factor in cost, as the cost of land and construction have as much as doubled in some parts of America within the past decade – but also of a higher quality.
Looking toward the expected lifespan of these homes, due to the precision of factory construction and the availability of new materials, some prefab or modular homes have the potential to even outlast traditionally-built, on-site housing.
A far cry from the “prefabs” of the 1950s, modules can be manufactured off-site in factories, in a cutting edge process of designing and building homes that can drive real change in an industry that has seen little change in centuries. Modular manufacturing permits us to get down to a level of detail and robustness that traditional architects, structural engineers and mechanical and electrical engineering consultants do not normally go into.
From a Zillow.com online article:
Currently, 33.9 percent of owner-occupied U.S. homes are owned by residents aged 60 or older, and 55.2 percent by residents aged 50 or older. As these households age and begin vacating housing, that could represent upwards of 20 million homes hitting the market through the mid-2030s.
The massive Baby Boomer generation has already begun aging into retirement, and will begin passing away in large numbers in coming decades – releasing a flood of currently owner-occupied homes that could hit the market. That could help end the last few years’ inventory drought, as well as a more fundamental shortage of homes in certain places.
This Silver Tsunami of homes coming to market could be a good substitute for new home construction, which has been in short supply for the past decade in large part because of difficult-to-overcome challenges faced by builders.
From a Wall Street Journal online article:
Economists say aging baby boomers are the biggest culprits because many are staying healthier later in life and choosing not to downsize. Some look around at the lack of smaller, less expensive homes and are loath to get into bidding wars with their children’s generation to get one.
Homeowners there are staying more than three years longer than they did in 2010. The inventory of homes for sale in Seattle has declined more than 50% over the last nine years, while home prices have risen more than 80%, according to Redfin.
Americans are staying in their homes much longer than before, creating a logjam of housing inventory off the market that helps explain why home sales have been sputtering.
Homeowners nationwide are remaining in their homes typically 13 years, five years longer than they did in 2010, according to a new analysis by real-estate brokerage Redfin. When owners don’t trade up to a larger home for a growing family or downsize when children leave, it plugs up the market for buyers coming behind them.