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The Changing Face of the US Housing Market: International Buyers, Big Banks, and the Affordability Crisis
Recent trends in the US housing market paint a concerning picture for potential homeowners and industry professionals alike. Let’s dive into some key developments and their potential implications.
International Buyers Retreat from US Real Estate
According to a recent report by the National Association of Realtors, international buyers are fleeing the US housing market at an unprecedented rate. In the 12 months leading up to March 2024, foreign buyers purchased just 54,300 homes worth a total of $42 billion. This represents a staggering 36% decrease from the previous year and marks the seventh consecutive year of decline, reaching an all-time low since NAR began tracking this data in 2009.
This trend raises questions about the accessibility of US real estate for both domestic and international buyers. Should we consider policy changes to prioritize housing affordability for local residents? For instance, what if we restricted international and institutional buyers until certain affordability benchmarks are met—such as ensuring the average income household can afford the average-priced home in any given market, or that essential workers like police officers, teachers, and paramedics can afford homes in the communities they serve?
Big Banks Re-enter the Mortgage Arena
In other news, Bank of America has re-entered the mortgage origination game, potentially shaking up the competitive landscape for loan officers. While BofA’s mortgage production increased in Q2 2024 compared to Q1, it’s still lower than the same period last year. This trend is mirrored by other major banks like Wells Fargo, JPMorgan Chase, and Citi.
The return of big banks to mortgage lending raises concerns about the de-personalization of the loan process. As an industry, we should consider the potential unintended consequences of moving away from relationship-based lending. Perhaps it’s time to advocate for policies that prioritize local knowledge and personal connections in the mortgage process.
The Alarming Trend in Home-buyer Age
Perhaps the most concerning trend is the steadily increasing age of both first-time and repeat home-buyers. According to recent data:
- In 1980, the median age of a first-time home-buyer was 29. Today, it’s nearly 35.
- For repeat buyers, the median age has jumped from 35 in 1980 to 58 today.
These statistics tell a sobering story: the American dream of home-ownership is becoming increasingly elusive. The six-year increase in the average age of first-time buyers is concerning enough, but the 23-year jump for repeat buyers is truly alarming. It suggests that many Americans are struggling to climb the property ladder, with the average age for a “move-up” home now squarely in the senior citizen category.
This trend represents a silent epidemic of housing unaffordability that deserves far more attention from policymakers, media, and industry professionals. We need to ask ourselves: Is it acceptable that the average age to buy a move-up home is now approaching retirement age? What does it mean for our society when the timeline for achieving traditional milestones of financial stability and home-ownership is stretched so thin?
As professionals in the housing and mortgage industry, it’s crucial that we start tackling these issues head-on. We need to advocate for policies that make home-ownership more accessible, push for meaningful investigative reporting on these trends, and work towards solutions that can help revive the American dream of home-ownership for future generations.
What are your thoughts on these trends? How can we as an industry work to address the growing crisis of housing affordability? Share your ideas in the comments below.
