Homeownership rates in the US have collapsed to 63.1 per cent, down from 2004 highs of about 69 per cent, according to the US Census Bureau Wednesday. As homeownership rates come full circle from the early 1990s levels, the Median Asking Price for Vacant Units has steadily risen.
Meanwhile, according to the National Association of Home Builders / Wells Fargo Housing Opportunity Index Thursday, solid home price appreciation more than offset a modest reduction in mortgage interest rates to push housing affordability lower in 2Q 2016.
The national median existing single-family home price in the second quarter was US$240,700, up 4.9 per cent from 2Q 2015 (US$229,400), which was previously the peak quarterly median sales price. The median price during 1Q of this year increased 6.1 per cent from 1Q 2015.
US Current Real Estate Conditions
Total existing-home sales, including single family and condos, rose 3.8 per cent to a seasonally adjusted annual rate of 5.50 million in 2Q, from 5.3 million in 1Q this year, and are 4.2 per cent higher than the 5.28 million pace during 2Q 2015.
At the end of 2Q, there were 2.12 million existing homes available for sale, which was below the 2.25 million homes for sale at the end of 2Q 2015. The average supply during the second quarter was 4.7 months – down from 5.1 months a year ago.
Despite falling mortgage rates and a small increase in the national family median income (US$68,774), swiftly rising home prices caused affordability to decline in the second quarter compared to a year ago.
To purchase a single-family home at the national median price, a buyer making a 5 per cent down payment would need an income of US$52,255, a 10 per cent down payment would require an income of US$49,504, and US$44,004 would be needed for a 20 per cent down payment.
In all, 62 per cent of new and existing homes sold between the beginning of April and end of June were affordable to families earning the median income of US$65,700. This is down from the 65 per cent of homes sold that were affordable to median-income earners in 1Q.
The national median home price increased from US$223,000 in 1Q to US$240,000 in 2Q.
Meanwhile, average mortgage rates edged lower from 4.05 per cent to 3.88 per cent in the same period.
Regional Breakdown
- Total existing-home sales in the Northeast jumped 7.6 per cent in 2Q and are 11.3 per cent above 2Q 2015. The median existing single-family home price in the Northeast was US$273,600 in 2Q, up 1.6 per cent from a year ago.
- In the Midwest, existing-home sales leaped 10.4 per cent in 2Q and are 6.6 per cent higher than a year ago. The median existing single-family home price in the Midwest increased 5.1 per cent to US$191,300 in 2Q from the same quarter a year ago.
- Existing-home sales in the South inched forward 0.3 per cent in 2Q and are 4.2 per cent higher than 2Q 2015. The median existing single-family home price in the South was US$214,900 in 2Q, 5.9 per cent above a year earlier.
- In the West, existing-home sales climbed 1.4 per cent in 2Q but are 2.2 per cent below a year ago. The median existing single-family home price in the West increased 6.5 per cent to US$346,500 in 2Q from 2Q 2015.