DUBLIN, December 09, 2021--(BUSINESS WIRE)--The "Residential Real Estate Market in United States - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.
US residential real estate market is poised to grow at a CAGR of 5.77% by 2026. With the favorable economic environment projected to continue in the country, the US housing market is anticipated to witness a modest growth in residential real estate in 2020 and 2021.
Demand continues to rise strongly. Existing home sales rose by 10.5% y-o-y to a seasonally adjusted annual rate of 6 million units in August 2020, according to the National Association of Realtors (NAR). Likewise, new homes sold soared 43.2% y-o-y to a seasonally-adjusted annual rate of 1,011,000 units in August 2020, according to the US Census Bureau.
Construction activity remains weak, despite this. In August 2020, building permits authorized for new housing units fell by 0.1% y-o-y, according to the US Census Bureau. Housing starts were up 2.8% while completions declined 2.4%.
The COVID-19 crisis significantly impacted the residential real estate market this spring. Health concerns and stay-at-home orders led to fewer buyers looking for homes and fewer sellers willing to list their properties or allow strangers to enter their homes during a pandemic.
Multifamily Housing to Remain Strong
Multifamily housing has risen in importance during the great financial crisis and continues to grow as a result of the influx of millennials into the marketplace. When the housing market collapsed in 2008, new home construction of all types (single family, multifamily, mobile homes, etc.) were adversely affected.
Multifamily occupancy has held up particularly well since the Great Recession, hovering in the 95% range, and several factors explain why. Supply played catch-up for much of the last decade, as almost nothing was built in the early part of the Great Recession recovery, with financing so hard to get. The high price of ownership for many people is another factor with the homeownership rate remaining well below its all-time high. Further, new apartment properties are targeting a new market. A new breed of renter emerged at the top end of the market; Class A, urban-core or prime suburban properties are likely beyond the reach of renters in existing, older units. A substantial number of completions and weak absorption in Q4 2020 led to year-over-year increases in vacancy in major metropolitan areas. But signs of a recovery are on the horizon. 2021 is expected to see a 20-year high absorption rate as the pandemic subsides and pent up demand drives the recovery.
The pandemic is not slowing construction. About 81,000 units were completed in Q4 2020, up from 77,000 in Q4 2019. The markets with the highest completions (relative to inventory) over the past four quarters are scattered across the U.S.
Demand for Housing Market to Remain Elevated
The American dream of homeownership has not been dampened by the Covid-19 pandemic and the economic downturn it has caused.
In the fourth quarter of 2020 there were an estimated 82.8 million owner-occupied households in the United States, according to recently released Census Bureau Data. The number of homeowners increased by an estimated 2.1 million over the prior year. Based on fourth-quarter non-seasonally adjusted data, this matches the largest prior net increase in homeowners that occurred during the housing boom between 2003 and 2004 (2.1 million).
Some of the growth in homeownership is attributable to overall growth in the economy and in the number of households in the U.S. over time. The addition of 2.1 million homeowners in 2020 represents an annual increase of 2.6%. This is the seventh largest percentage increase in homeowners dating back to 1965.
The boom in the number of homeowners also boosted the homeownership rate. As of the fourth quarter of 2020, 65.8% of households own their homes, up from 65.1% a year earlier. This 0.7 percentage point increase in the homeownership rate is not the largest on record (the rate increased 0.9 points from 1994 to 1995), but it is large nonetheless.
The report covers the major players operating in the US residential real estate market. The US residential real estate market is fragmented with the top 50 companies accounting for nearly 30-40% of the market share. Large companies have advantages in terms of financial resources, while small companies can compete effectively by developing expertise in local markets. Some of the major companies include Equity Residential, Brookfield, Essex Property Trust, and Simon Property Group.
Greystar Real Estate Partners
Simon Property Group
Mill Creek Residential
Lincoln Property company
The Michaels Organization
Essex Property Trust
Keller Williams Realty, Inc.
Current Economic Scenario and Consumer Sentiment
Residential Real Estate Buying Trends - Socioeconomic and Demographic Insights
Government Initiatives, Regulatory Aspects for Residential Real Estate Sector
Size of Real Estate Lending and Loan to Value Trends
Interest Rate Regime for General Economy, and Real Estate Lending
Rental Yields in Residential Real Estate Segment
Capital Market Penetration and REIT Presence in Residential Real Estate
Affordable Housing Support Provided by Government and Public-Private Partnerships
Real Estate Tech and Startups Active in Real Estate Segment (Broking, Social Media, Facility Management, Property)
For more information about this report visit https://www.researchandmarkets.com/r/byd1vy
View source version on businesswire.com: https://www.businesswire.com/news/home/20211209005442/en/
Laura Wood, Senior Press Manager
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