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Through the first half of 2018, existing-home sales are down just a tad, by 2.2%, while new home sales are up 7.4%. Home prices continue to move higher by 5%. Distressed property sales have fallen to historic lows, comprising only 3% of total sales in recent months. The one area of concern is increasing housing unaffordability.
Yet even with higher mortgage rates and higher home prices, the homeownership rate has been inching higher. After touching a cyclical low of a 63% ownership rate in late 2015, the rate increased to 64.4% in the second quarter of 2018 as three million additional households became homeowners in this time, bringing the total to 77.9 million. The total number of renter households has remained roughly the same at 43 million for the past three years.
With rising home prices and more homeowners, the aggregate owners’ equity in real estate is projected to grow by $1.4 trillion this year. That gain would bring the net housing equity (home value minus mortgage outstanding) to over $15 trillion. Considering it had been only $6 trillion a decade ago at the depths of the housing market downturn, the overall picture of the housing market is quite impressive.
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