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The World of Real Estate - US - August 2015

Published By :

Mintel

Published Date : Aug 2015

Category :

Banking

No. of Pages : N/A

The real estate market has begun to recover from the recent crisis. Mortgage rates are still low, housing prices have rebounded in many markets, and most people have a positive attitude toward buying property. However, there are social trends and economic challenges that are influencing the market, causing a shift toward renting rather than purchasing.

Overview

What you need to know
Definition

Executive Summary

The issues
A shift toward renting
Figure 1: Percentage of households that own vs. rent homes, 2004-14
Figure 2: Home ownership rates, by age, 2004-14
Figure 3: Attitudes toward home ownership, by generation, May 2015
The opportunities
Single people
Figure 4: Home ownership/plans to purchase home, by marital status, May 2015
Single women are buying more homes
Figure 5: Adult composition of home buyer households, 2014
Figure 6: Chase and Capital One mortgage ads, 2015
What it means

The Market – What You Need to Know

Housing sales are strong and strength is forecast to continue
Inventory is falling
Permits for multiunit buildings are on the increase
Sale prices are rising faster than rents
Mortgage rates are staying low
More foreigners are purchasing homes

Market Size and Forecast

Historic and projected sales performance
Figure 7: Total US value sales and forecast of housing, at current prices, 2010-20
Growth in existing home sales continues
Figure 8: Existing home sales, June 2014-June 2015
Inventory is falling
Figure 9: Existing homes inventory, Jan. 2102-June 2015

Market Breakdown

Permits for multiunit buildings are rising faster than for single-family units
Figure 10: Number of permits for new privately owned housing units, Jan. 2004-June 2015

Market Perspective

Median sales prices are rising faster than median rents
Figure 11: Median house prices and rents, 2004-14

Market Factors

Unemployment continues to fall
Figure 12: Unemployment rate, June 2015-June 2015
Mortgage rates are trending down
Figure 13: Mortgage rates, July 2005-July 2015
Mortgage debt
Figure 14: Total mortgage debt, Q1 2005-Q1 2015
Rents are rising
Figure 15: Monthly rents, by region, 2004-Q1 2015
Figure 16: Live rent-free to save money for a down payment, by generation, May 2015
An increase in foreign buyers
Figure 17: Number of sales to foreign buyers, 2009-15*
Figure 18: Dollar volume of sales to foreign buyers, 2009-15*

Key Players – What You Need to Know

The return of the first-home buyer
Lenders are loosening mortgage restrictions
More people are up-to-date on their mortgages
Consumers have positive attitudes about real estate
Fewer people own homes

What’s Working?

First-time home buyers coming back
Figure 19: Plan to buy in next five years, by generation, May 2015
Mortgage restrictions are beginning to loosen
Figure 20: Movement of credit standards on all types of residential mortgages, by type of mortgage, April 2015*
Mortgage delinquencies are decreasing
Figure 21: Percentage of mortgage balances 90+ days delinquent, Q1 2005-Q1 2015
Consumer attitudes indicate strong market ahead
Figure 22: Attitudes toward homeownership, by home ownership status, May 2015

What’s Struggling?

Homeownership rates are falling
Figure 23: Home ownership rates, by age, 2004-14

What’s Next?

Trulia going mobile
Xome
Interest-only loans are back

The Consumer – What You Need to Know

Houses are purchased, condos are rented
Mortgages are king
Owning a home is not important to everyone
Why people rent
Online home-search tools are important

Homeownership

Most own a home
Figure 24: Homeownership, May 2015
Homeownership among young women is lagging
Figure 25: Homeownership, by generation and age, May 2015
Renting is more popular among women
Figure 26: Residence rental, by gender and age, May 2015
Ownership of non-primary residences
Figure 27: Ownership of non-primary residence, by generation, May 2015

Reason for Buying Non-primary Residence

Second homes are primarily for vacation
Figure 28: Purpose of secondary residence, May 2015

Financing a Real Estate Purchase

Mortgage for a primary home, cash for a second home
Figure 29: Method of financing home purchase, by type of home, May 2015

Purchase or Rent?

Owning a home is not a primary financial goal for most consumers
Figure 30: Importance of owning a home, by household income, generation, parental status, May 2015
Who plans to buy a home next?
Figure 31: Plan to purchase home in next five years, by generation, Hispanic origin, area, May 2015

What Do Renters Think?

Not everybody wants to buy
Figure 32: Attitudes toward home ownership, by home ownership status, May 2015
Some renters may just be leery of the market
Figure 33: Attitudes toward home ownership, by ownership status, May 2015
Reasons for renting
Figure 34: Reasons for renting a residence, May 2015
Women are having trouble saving for a down payment
Figure 35: Reasons for renting a residence, by gender and age, May 2015

The Home-buying Process

More home searching done online
Figure 36: Researched properties online, by gender and age, May 2015
But real estate agents are still important
Figure 37: Preference for using real estate agent, by generation, May 2015
Real estate agents are more popular with those with high incomes
Figure 38: Preference for using real estate agent, by household income, May 2015
Real estate agents help with mortgages
Figure 39: Used mortgage lender recommendation from real estate agent, by generation, Hispanic origin, and parental status, May 2015
Opportunities for real estate agents
Figure 40: Preference for using real estate agent – CHAID – Tree output, May 2015

Attitudes Toward Homeownership

Most think homeownership is important
Figure 41: Importance of homeownership, May 2015
Figure 42: Attitudes toward homeownership, by homeownership, May 2015

Real Estate as an Investment

Most believe real estate is a smart investment
Figure 43: Attitudes toward real estate as an investment, by generation, May 2015
Married couples are more positive about real estate as an investment
Figure 44: Attitudes toward real estate as an investment, by marital status, May 2015

Appendix – Data Sources and Abbreviations

Data sources
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations
Terms

Appendix – CHAID Analysis Methodology

Methodology
Figure 45: Attitudes toward home ownership– CHAID – Table output, May 2015

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