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MReport_December2017

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46 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Construction of Large Homes Drops According to the Census Bureau and NAHB, the large home market peaked in 2006, and has seen declines since. A ccording to recent a National Association of Home Builders (NAHB) report, data collected by the Census Bureau's Survey of Construction shows that the share of homes started with 5,000 square feet or more of living space dropped to 3.1 percent in 2016 from 3.9 percent in 2015. The 3.1 percent share of all homes started in 2016 translates to 24,000 5,000-plus square foot homes, compared to 28,000 homes of that same square footage started in 2015. Coincidentally, 2015 had the highest number of 5,000+ square foot homes started since 2007, which was right around the start of the housing bubble. According to the Census Bureau data presented by the NAHB, the market peaked in 2006 with 45,000 homes started. It then dropped to the still respect - able number of 37,000 homes in 2007. The next year saw a considerable drop-off to 20,000 homes, and well under 20,000 homes were started from 2009- 2012, which accounted for less than 3 percent of all single-family construction at the time. The 3.1 percent share of all homes started in 2016 is the lowest since 2012. However, the decreasing number of 5,000+ square foot homes is indicative of a recent trend of single-family homes decreasing in size. A report published even earlier in 2017 by the NAHB cites townhouse growth as a factor in decreasing new home size. Census data from that report said that the current average square footage for new family homes sits at 2,628 square feet. The average square footage of single-family homes decreasing along with the share of 5,000+ square foot homes indicates that the historical post-recession trend of homebuyers facing less credit restrictions is coming to an end. "Size will trend lower as build - ers add more entry-level homes into inventory," said the report. The Least Affordable Cities in North America To measure affordability, Point2Homes calculated an affordability ratio by taking the median home sale price and dividing it by median family income. I n a study looking at the 50 most populous cities across North America, Iuliana Mindru, a content writer for Point2Homes, was able to deter - mine an affordability ratio for each city. Data for annual household income figures was pulled from the U.S. Census Bureau, Statistics Canada, and the INEGI's Module of Socioeconomic Conditions 2015 in Mexico. Home price data was pulled from PropertyShark's MLS database for the U.S. CREA and Local Real Estate Associations for Canada, and the Sociedad Hipote - caria Federal for Mexico. To measure affordability, Point2Homes calculated an affordability ratio by taking the median home sale price and dividing it by median family income. The higher the ratio, the longer it takes for a family to pay off their house, therefore the wider the gap of affordability in the housing market. The top five least affordable cities were Vancouver, with a me - dian multiple of 17.3, Manhattan, at 15.6, San Francisco, at 13.8, Brooklyn, at 13.1, and New York at 12.1. The study ranks cities on a scale of "affordable" to "mod- erately, seriously, and severely unaffordable," with scores ranging from 3.0 and under, 3.1 to 4.0, 4.1 to 5.0, and 5.1 and over respec - tively. The winner in most affordability, not just in the U.S. but in all of North America, was Detroit, at 1.8. California stands out for having four cities in the top 10 for least affordable. Besides San Francisco, this included Los Angeles (12.1) at sixth, followed by San Jose (9.0) at eighth, and San Diego (8.3) at 10th least affordable. Regarding the U.S. alone, the least affordable cities were Manhattan, San Francisco, Brooklyn, New York, and Los Angeles. Brooklyn stands out for being three times as expensive as the national median, even though it used to be moderately priced. It's median selling price is currently $725,000. "The winner in most affordability, not just in the U.S. but in all of North America, was Detroit."

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