Highlights from September/October REALTOR Magazine
Deborah Van Eendenburg
I picked up the latest issue of REALTOR Magazine when I was in the Keller Williams Integrity Lakes office earlier this week. The content doesn’t necessarily apply locally, but I found the economic report interesting. Again, keep in mind this is all national level economics so it may not be totally on-the-nose for the market in Minneapolis and St. Paul.
National Association of REALTORS® Chief Economist Lawrence Yun reported that annual home sales have not grown since 2016, even though during that time our economy has added 8 million net jobs at higher pay AND household net worth grew by $13.5 trillion (thanks, rising stock market and surging real estate prices). Homeownership rates have remained stagnant, and a theory for this is that there has been a “concentrated build-up in wealth than if ownership had expanded.” So if there are more jobs and higher net worth per household, why aren’t the sale of homes increasing? Maybe because there are fewer financial incentives to move from rental to ownership, or to upgrade to a new home - we have reduced tax benefits for homeowners right now.
Some good news is that we have excellent (like, wildly low) mortgage rates at under 4% (if you qualify). Housing supply - the number of homes available to buy - is still low, but if you’re interested in new construction homes companies are responding to the desire by building more homes to a higher range of specifications (ways you can customize within a house design) at lower price points.