Is housing one of the best money-making opportunities available today? I know, how could that be possible with the Pandemic continuing to gain steam? Even with the Pandemic, I am reading more and more positive reports from experts. Here are some of the facts that keep reappearing.
Home sales are surging, posting their biggest month over month gains in more than a decade. Refinancing is going through the roof, creating record profits for mortgage brokers. Further, home prices are rising. According to the National Association of Realtors (NAR), we have seen 100 straight months of price increases, culminating in a 6% spike last month.
We are also definitely seeing a shortage of quality homes for sale. Bidding wars are fast becoming the rule, not the exception in many markets. Data from internet realtor Redfin shows more than half of the buyers who purchased a home in the past three months were forced into a bidding war.
Hammered by the housing bust, homebuilders have been slow playing new builds for the past decade. Census Bureau data shows an average of 1.5 million homes were built each year since 1959. Yet over the past decade, just 900,000 homes have been built per year. We have a serious housing shortage in America today. The Pandemic is compounding the issue as millions of homeowners are choosing not to list their homes during these uncertain times.
Millennials are the biggest generation in US history—bigger than baby boomers. And they are not kids anymore as the average millennial turns 32 this year. That age is slightly over the median age of first-time homebuyers. The first wave of millennial homebuyers is starting to flood the market. Every year for the next decade, tens of millions more millennials will hit home-buying age.
It is a basic supply and demand equation. More demand is upon us while supply has tightened. Further, it is not an equation that can turn anytime soon. Sure, we will have some cyclical patterns as the Pandemic ebbs and flows; however, the intermediate to long-term trend is leading me to believe that the Boom is coming. As always, I am here to help. Stay safe!