Gradual Housing Market Recorvery - 4/20/15
While the rental housing market continues to surge in much of America, the owner-occupied portion of the nation’s housing market continues to recover only gradually. Multifamily construction, which includes apartments, has fully recovered to pre-recession levels according to Moody’s Analytics. But sales of new single family homes are still only about two thirds of the pre-housing boom volume.
Home prices gains have been slowing since late twenty thirteen, with prices up nationally by about five percent over the past year. The relatively stronger performance of rental markets persists despite the presence of extraordinarily low mortgage rates. Much of this is explained by the finances of young people. As a rule of thumb, younger families that rent can transition to homeownership if their debt-to-asset ratio is fifteen percent or lower.
The lower that ratio, the less debt with which those young people are associated. According to a twenty thirteen survey, the ratio for young families is closer to twenty percent, which means that the typical younger family has a long way to go before they can really added to housing demand. The situation for older families is better, but there is still much room for improvement there as well.