There have been several recent discussions on whether the economy is in a recession.
In June, fast-rising home prices and interest rates coupled with an uncertain economy helped cool the nation’s housing market. This led to a nearly 2% increase in the number of homes on the market. That marks the first month since July 2019 (pre-pandemic) that housing inventory increased year-over-year.
Despite rising home prices, rents and mortgage rates, the U.S. homeownership rate increased while the rental vacancy rate decreased during the second quarter of 2022 compared to last year, according to data by the U.S. Census Bureau.
This year-over-year rise in the homeownership rate was primarily motivated by an increase in the homeownership rate of those under the age of 35. In Q2 2021, the homeownership rate for those under 35 was 37.8%, compared to 39.1% this year.
“Declining affordability may temper millennial homeownership demand in 2022,” stated First American Deputy Chief Economists Odeta Kushi, “Despite growing affordability headwinds, millennials continue to transition into their prime home-buying age and will remain the driving force in potential homeownership demand in the years ahead.”
Regionally, the South had the second-highest homeownership rate at 67.8% and the highest rental vacancy rate at 7%.
Moody Analytics Chief Economist Mark Zandi also stressed that despite the headwinds, we are unlikely to see a housing-market meltdown like the one experienced during the global financial crisis about 15 years ago.
“The worst price declines [are projected to] be close to double digits — [near] 10% peak to trough — [in places like a] Phoenix, or Tampa. Although in the grand scheme of things, those also are markets where prices were up 30% this past year and 30% the previous year, so you’re only giving back a bit of what washas been gained over the past few years.”
You can learn more about these market indicators by watching GTR’s Consulting Economist Elliot Eisenburg Ph.D.’s latest video here where he further discusses the local market and provides an in-depth analysis of the nation’s current economic status.