If you’ve been keeping an eye on home values around Metro DC, you’ll know— American homeowners are now a whole lot richer.
According to internet realtor Zillow, US housing gained $2.5 trillion in value last year, which makes that gain the biggest since 2005.
There’s not doubt about it, the housing market is BOOMING! In fact, the CEO of homebuilder Toll Brothers even confirmed, “We’re experiencing the strongest housing market I’ve seen in my 30 years.”
And it’s not just one side that’s gaining in particular, for instance homeowners seeing a major boost in equity, but homebuyers are equally as motivated to jump into the hot market.
In 2020 alone, mortgage lenders handed out a record $4.4 trillion in home loans, with America’s largest lender Quicken Loans writing $1 billion in loans— per day!
This is one of the greatest comebacks in American history. But how do we know? Let’s compare.
Between 2006 and 2009, the average home lost over a quarter of its value, with more than eight million Americans losing their homes during the crisis.
Millennials, the largest generation in US history, was shattered as they began to start their careers, purchase their first homes, and start families. Some even believed US real estate was a win-win investment, so to say they were taken by surprise was an understatement.
After the housing bust, nearly everyone (even millionaires!) had trouble getting mortgages, so there wasn’t a chance a 20-something with less than five figures in the bank could qualify.
By 2018, homeownership had sunk to a record low, which created the mindset that Millennials might be doomed to live at home forever.
But given the following chart—the most important chart in all of housing—you’ll see that isn’t the case!
The above chart breaks down homeownership by age in which you can see the number of young people who owned a home peaked in 2005, then collapsed over the next decade. However, that number began to tick back up when a wave of new homebuyers burst into the market.
After being missing from the market for a decade, Millennials now make up the largest share of homebuyers, according to the National Association of Realtors.
On a recent earnings call, America’s largest homebuilder, DR Horton, stated, “Over 40% of our buyers are under 34.” Even Bloomberg recently posed the finding that Millennials are skipping the starter home and opting for mansions instead.
Millennials are piling into the market in record numbers and with the average age of a first-time buyer being 31 (with the average Millennial having just turned 31), this massive trend is really only just beginning.
Ready to start your home search? Give The Estridge Group a call today!