Millennial Home Buyers | Home Prices vs. Inflation | New Construction Homes | True Cost of Homeownership | Real Estate Agent Statistics | Rent Prices vs. Income | Attitudes Toward iBuyers | Climate Change and Home-Buying | Home Price per Square Foot | Recent Home Buyers | Where Americans Want to Live | Recent Home Sellers | Haunted House Data
The U.S. housing market of 2021 and 2022 witnessed an unprecedented surge in home prices, drastically changing the landscape for buyers, builders, owners, and sellers.
The COVID-19 pandemic rattled the job market and sent stocks plummeting, sparking a rapid grab for real estate. As demand rose, prices soared. Those who owned homes were presented with an opportunity to cash in, while many who didn't were either priced out of ownership or swept into an aggressive competition for remaining properties.
In addition to this supercharged supply-demand dynamic, the current housing market has introduced new trends and considerations, from an uptick in the use of real estate agents to a greater awareness of climate change impacts when buying a home.
To understand more about the housing industry's new realities, Clever Real Estate and its partner websites have commissioned a series of surveys and data-driven analyses to gauge what it's like for Americans trying to navigate the real estate market. Read on for more.
- Millennial Home Buyers
- Home Prices vs. Inflation
- New Construction Homes
- True Cost of Homeownership
- Role of the Realtor
- Rent Prices vs. Income
- Attitudes on iBuyers
- Climate Change and Home-Buying
- Home Price per Square Foot
- Recent Home Buyers
- Where Americans Want to Live
- Recent Home Sellers
- Haunted Houses
What the Housing Market Is Like for Millennial Home Buyers
As more millennials reach homeownership age, many still struggle to become first-time home buyers. The biggest financial hurdle for millennial home buyers in 2022 is the competitiveness of the market (59%), followed by the high price of houses (56%) and difficulty saving for a down payment (52%).
Key Statistics on Millennial Home Buyers in 2022
- 90% of millennial home buyers would consider buying a house sight unseen, and 82% would buy a fixer-upper.
- 46% of millennial home buyers expect to max out their budget when buying a home, and 17% would offer $100,000 or more above asking price for their dream home.
- About one-third of millennial home buyers (31%) plan to live in their next home for less than five years.
Source: Millennial Home Buyer Report (2022 Edition), Real Estate Witch, January 2022
Why Millennials Can't Afford Homes: Home Prices vs. Inflation
Rising costs have priced many millennials out of homeownership. Home prices are rapidly outpacing inflation — increasing 1,608% since 1970, while inflation has increased 644%. Price hikes are offsetting wage raises across the nation, rendering increases to annual income less effective against inflation and climbing home prices.
Key Statistics on Home Prices vs. Inflation
- If home prices grew at the same rate as inflation since 1970, the median home price today would be just $177,788 – rather than $408,100.
- In 1985, the average baby boomer in their 30s paid $82,800 for a home, while millennials in their 30s paid $313,000 in 2019.
- The cities with the largest home price increases since 2000 are San Francisco (290%), Los Angeles (280%), and Riverside, Calif. (278%). The cities with the smallest increases are Cleveland (60%), Detroit (62%), and Memphis, Tenn. (72%).
Source: Home Prices vs. Inflation: Why Millennials Can't Afford Homes (2022 Data), Anytime Estimate, March 2022
What Home Buyers Say About New Construction Homes
New construction homes can be an appealing option for buyers struggling to beat their competition for existing homes. However, 92% of those who bought a new construction home say the process was more expensive than they anticipated, and 85% experienced some type of delay.
Key Statistics on New Construction Homes
- 89% of buyers deal with premature repairs or maintenance after moving into their newly built homes.
- 66% of new construction buyers have at least one regret about the home-building process, including 26% who wish they would've purchased an existing home.
- Fewer than half of the new construction buyers we surveyed (49%) worked with a real estate agent during the purchasing process.
Source: Most Americans Have Regrets About Buying a New Construction Home (2022 Data), Real Estate Witch, April 2022
The True Cost of Owning a Home
Owning a home means more than simply making a down payment and paying off a mortgage. The average homeowner pays about $15,405 each year — on top of their mortgage — for insurance, utilities, repairs, and other costs.
Key Statistics on the True Cost of Homeownership
- 52% of homeowners say they were surprised by the true cost of owning a home.
- One in eight homeowners (12%) say the benefits of owning a house are not worth the hassle.
- A majority of homeowners (60%) have experienced buyer's remorse, and 72% say they regret at least one aspect of their home purchase.
Source: The True Cost of Homeownership (2022 Data), Clever Real Estate, February 2022
Real Estate Agent Statistics: More Americans Are Hiring Realtors
A hot seller's market in 2022 led to renewed interest in hiring a reliable realtor. Nearly 4 in 5 Americans selling their home (77%) plan to use a realtor, up from 54% in 2019.
Key Statistics on the Role of the Realtor
- 1 in 5 home sellers (19%) say the hardest part about selling their house is finding a realtor.
- Despite increasing interest in using a realtor, 47% of home sellers believe artificial intelligence (AI) can outperform a traditional real estate agent.
- Many home sellers don't fully understand the role of a real estate agent. About 47% incorrectly think their listing agent is responsible for appraising the home's value, and 34% overestimate the cost of commission.
Source: Role of the Realtor: Expectations and Misconceptions, Clever Real Estate, April 2022
U.S. Rent Prices Are Outpacing Income
The gap between American workers' income and what they have to pay in rent has grown significantly over the last few decades. From 1985 to 2020, rent prices increased 149%, while income grew just 35%.
Key Statistics on Rent Prices
- From 1985 to 2020, the median U.S. rent-to-income ratio nearly doubled from 9% to 17%.
- The average rent-to-income ratio is 89% higher for millennials than it was for baby boomers at the same age in 1985.
- If rent prices grew at the same rate as income since 2000, the median rent in 2020 would cost about 34% less — $586 per month instead of $894.
Source: U.S. Rent Prices Are Rising 4x Faster Than Income (2022 Data), Real Estate Witch, May 2022
How Americans View iBuyers
iBuyers are real estate tech companies that make instant cash offers to sellers with flexible closing timelines. About 65% of homeowners say they are open to selling their home with an iBuyer, rather than listing with a real estate agent.
Key Statistics on iBuyers
- Millennials are more likely than baby boomers to express interest in selling with an iBuyer — 72% say they're open to the new tech compared to 52% of baby boomers.
- Despite interest in iBuyers, 72% of survey respondents were unable to define what an iBuyer is before being informed.
- 91% of homeowners consider avoiding expensive realtor commissions a priority when selling their homes.
Source: American Attitudes on iBuyer Companies (2022 Data), Clever Real Estate, June 2022
How Climate Change Impacts Home-Buying
The threat of climate change is becoming more noticeable to the U.S. real estate industry. Despite the dangers, many of the states most threatened by disasters are home to some of the most in-demand metro areas for home buyers, including cities in Florida, Texas, and California.
Key Statistics on Climate Change and Home-Buying
- Since 1980, the four states most financially impacted by climate change have been Texas, Florida, Louisiana, and California. In fact, of the 145 billion-dollar disasters in the U.S. since 2012, Texas has been impacted by 73 of them.
- Texas is the state most at risk of hurricanes, river flooding, and winter storm damage.
- The states with the lowest risk of climate change impacts are clustered in the Northeast: Rhode Island, Vermont, Delaware, New Hampshire, and Maine.
Source: Home-Buying & Climate Change: The Riskiest and Safest Places in 2022, Home Bay, June 2022
U.S. Homes Are Rising in Price per Square Foot
Home buyers are quickly learning that smaller homes today are more expensive than larger homes have been in the past. The median price per square foot for a home has increased 310% since 1980, from $42 to $169. In addition, the median square footage of new single-family homes has increased 50% since 1980, from 1,570 to 2,356 square feet.
Key Statistics: Home Price per Square Foot
- Compared to the average baby boomer entering their 30s in 1985, the average millennial entering their 30s faces a 9.7% higher median sale price per square foot of house.
- The three cities with the lowest home prices per square foot are Memphis, Tenn., Cleveland, and Pittsburgh.
- The three cities with the highest home prices per square foot are San Jose, Calif., San Francisco, and Los Angeles.
Source: The Price per Square Foot for Homes Has Quadrupled Since 1980 (2022 Data), Home Bay, August 2022
Recent Home Buyers Are Making Big Sacrifices to Close
The U.S. housing market of 2021 and 2022 has been one of the most competitive in history. In order to secure a house, 41% of recent buyers made an offer on five or more homes, and 1 in 10 buyers (11%) made offers on 10 or more homes.
Key Statistics on Recent Home Buyers
- 80% of home buyers had to compromise on their priorities, and 72% have regrets about their purchase.
- 70% of those who purchased a home in 2021 or 2022 were first-time home buyers.
- Recent first-time buyers paid a median of $510,000 — 13% more than repeat buyers paid ($450,000). Almost one-third of all recent buyers (31%) paid over asking price.
Source: How Buyers Landed a Home in Today's Competitive Market (2022 Study), Anytime Estimate, August 2022
Where Americans Want to Live — and Don't Want to Live
People in the U.S. have a significant number of factors to consider when deciding where to settle down, and 92% of Americans say they're open to moving to another city or state.
Key Statistics on Where Americans Want to Live
- The biggest factors preventing Americans from moving are cost (52%) and proximity to family and friends (29%).
- On average, Americans surprisingly consider Virginia Beach, Va., the most desirable and most underrated city.
- On average, Americans consider Los Angeles the least desirable and most overrated city.
Source: The Best (and Worst) Places to Live in 2022, According to Americans, Home Bay, September 2022
What the Housing Market Is Like for Recent Home Sellers
The past two years were some of the best to sell a home in recent history, with a high competition among buyers making the process fast — and lucrative — for sellers. More than half of recent sellers (54%) accepted an offer within a month of listing, including nearly 1 in 5 (19%) who accepted an offer within a week. In addition, nearly all sellers (94%) received more than one offer on their home, including 54% who received five or more offers.
Key Home-Selling Statistics
- 80% of 2021 and 2022 sellers sold their home for at least asking price, including 35% who sold for more than the asking price.
- Despite the upside, 90% of home sellers have some regrets, including 25% who say they should have made more repairs before listing their home.
- 90% of sellers also compromised on their priorities. 2021 sellers, however, were 2.5x more likely than 2022 sellers to say they did not have to make compromises when selling, indicating a cooling market.
Source: 90% of Recent Home Sellers Have Regrets, Despite Hot Market (2022 Data), Clever Real Estate, October 2022
Data on Haunted Houses in Real Estate
Many who wanted to purchase a home in 2022 found the ultra-competitive market to be a nightmare. So much so, that a majority of Americans (58%) would consider buying a house they believe to be haunted.
Key Haunted House Statistics
- Just under half of Americans (47%) would rather purchase a haunted house than live in a home that used to serve as a meth lab. Another 42% would prefer a haunted house to living within a mile of a waste management facility.
- About 24% of Americans say they've lived in a haunted house at some point.
- Ghosts are frightening — but 94% of homeowners are more afraid of home-repair issues, such as mold (63%), termites (63%), and foundation problems (60%).
Source: More Than Half of Buyers Would Purchase a Haunted Home in a Competitive Market (2022 Data), Real Estate Witch, October 2022
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