Future of Home Ownership

A combination of factors, with the historic shortage of for-sale homes being the most significant, has created a persistently tight housing market. Redfin chief economist Daryl Fairweather says, “Millennials are the largest generation, so we have all of this added demand for housing when we really just didn’t plan for it.”

There simply aren’t enough houses on the market for people who want to buy a home. Most prospective buyers are still on a path to homeownership. However, these supposed-to-be buyers have had to come to terms with the reality that they are buying not just a house but also a vision: a dream of home. Recent polls have shown that about 60% of hopeful homeowners are concerned about being able to afford a home in the future. In addition, the National Association of Realtors reported recently that the average price of a home has increased by 67% since 2011.

It is argued by some that the housing market is changing in ways that could effectively transition us away from single-family homes, especially in urban areas. The distance to jobs has become a fundamental issue of affordability and this may well cause a market pivot toward smaller homes and more varieties of home ownership like —townhomes, duplexes, triplexes, condos and so on—instead of the single-family houses that have dominated the recent past. Not everyone would see this as a good thing, of course.

In summary, the home-buying market is difficult for many prospective buyers. The principal reason for this, as even the most casual observers of the market may have noticed, is a minimal of homes for sale. Meanwhile, the diversifying demographic trends of the past few decades continue to change quickly, adding difficulty to simply identifying a reasonable set of target buyers. And as these buyers are being asked by the market to dig deep into their pockets—at a time when their pockets could hardly be deeper—some of them have already, in recognizable fashion, redefined what a dream home even looks like.

Until next time...