With housing prices steadily being driven up by lack of inventory, is homeownership moving out of reach for the average American?
Record low for homeownership
According to the U.S. Census bureau, homeownership is now at a record low of 62.9%. outside low inventory, we’ve seen a few different explanations as to why:
- Average salary stagnation over the past twenty years while the cost of living continues to rise. Currently a quarter of Americans are spending more than 50% of their income on housing
- Millennials not willing to commit to owning and rather turning to rental arrangements, partly because of their indebtedness.
- Baby boomers, getting on in years, are now beginning to exit home ownership
- The construction industry is being stymied by regulations on the Federal, State and municipal level. It is compensating by putting more emphasis on luxury new homes, where there is more profit
There are a few positives in the picture however:
- Mortgage rates are currently very low and are expected to remain low within the next several months. Low mortgage rate are an incentive to purchase new homes
- Purchases of new homes were up in June by 3.5%, the highest pace since 2008, according to the US department of Housing and Urban development.
- Housing sales to investors have seen their lowest levels since 2009, according to the National Association of Realtors. This could be interpreted as an improvement in the housing market’s health, since less and less foreclosures are up for sale.
Admittedly, it is still hard to see how the trend away from homeownership could be reversed. The answer could lie in new construction materials and technologies, however. For example, back in the 1970s when engineered wood came into the market, it helped make residential construction both profitable for builders and affordable homeowners.
Engineered wood technology continues to evolve even 40 years later. Think of the 12 to 18 story “woodscrapers” either in construction or currently being planned. Or Glulam beams that are pound for pound stronger than steel.
The point is engineered wood is in constant evolution. Forward-thinking manufacturers are designing engineered wood products with characteristics that will help builders cut down on material and labour costs, while offering some of the highest quality and best load-bearing performances in the industry.
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