MReport July 2018

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TH E M R EP O RT | 49 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 Fueling Vacancy Drops Strong housing demand is being tracked in all U.S. markets. D espite the ongoing inventory shortage and rising prices, homeownership has stayed relatively steady year-over-year. According to the U.S. Census Bureau, the homeownership rate year-over- year remained stable and rose from 63.6 percent in Q1 2017 to 64.2 percent in Q1 2018. Cheryl Young, Senior Economist for Trulia, called this a "significant" increase over the previous year. "Strong demand boosted by healthy economic fundamentals has been winning over daunting headwinds such as skyrocketing prices and scarce supply," Young said. "Despite these challenges, mil - lennials led the charge in increas- ing homeownership, with a 2.92 point annual increase in the home- ownership rate compared to a 0.94 point annual increase overall." The shrinking inventory, mixed with the healthy economy, has caused a drop in vacancies over the past few years. Since Q1 2010, vacancies have fallen from a rate of 2.6 percent to 1.5 percent in Q1 2018. Year-over-year, the rate of vacancies dropped from 1.7 percent in Q1 2017 to 1.5 percent in Q1 2018. The low vacancy rate means high home prices have risen even further. As of Q1 2018, the median asking price for a home is $196,700. "The decline in vacancy rate has been an important, though silent addition to the housing sup - ply," Tian Liu, Chief Economist for Genworth Mortgage Insurance said. "With vacancy rates now approaching the lowest level since the early-1990s (it troughed in 1993 at 1.4 percent), home prices will likely rise further, and the need for more affordable new homes is also greater. We expect continued improvement in homeownership rates among households headed by people under age 40, sup - ported by a strong job market and improving credit availability." The U.S. Census Bureau stated that approximately 87.5 percent of homes in the U.S. were occupied in Q1 2018, while 12.5 percent were vacant. Homeownership was highest in the Midwest, at a rate of 67.9 percent, followed by the South (66.3 percent). Homeowners, Buyers Get Eco-friendly A National Association of Realtors survey found that its members are prioritizing energy-efficiency in listings. H omeowners are going green, according to the National Association of Realtors (NAR). In a recent survey, NAR found that the majority of its members, 71 percent, felt that the promotion of energy efficiency in their listings was either somewhat or very valuable. This means that potential homeowners buy green, and many may make their purchase decision based on if a home has energy- efficient amenities. As more buyers look to go green, more homes are moving toward renewable, alternative energy. According to NAR, 80 percent of respondents to their survey say they had properties with solar panels in their market. Some respondents, 39 percent, even say the presence of solar panels could increase the value of a home. Only 11 percent of respondents believed that the presence of solar panels decreases the value of homes on the market. Other energy efficient home ideas, such as wind farms and "tiny homes," have not quite reached the level solar panels have, however. NAR reports that 61 percent of its survey respondents had no tiny homes in their market, while just 13 percent stated that they had wind farms in their market. Though most respondents agreed on the value of going green to the homes in their market, it seems to have little impact on the time homes spend on the market. Only 6 percent of respondents be - lieved homes with green certifica- tions, such as LEED, Energy Star, or NGBS, spent a little less time on the market. Meanwhile, 40 percent believed homes with these green certifications spent neither more nor less time on the market. Still, buyers recognize the value of an energy efficient home. According to NAR, 61 percent of clients are at least somewhat interested in sustainability, with 9 percent being very interested. "Strong demand boosted by healthy economic fundamentals has been winning over daunting headwinds such as skyrocketing prices and scarce supply." —Cheryl Young, Senior Economist, Trulia

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