Market Research Report
Residential Real Estate Market in United States - Growth, Trends and Forecast (2020 - 2025)
|Published by||Mordor Intelligence LLP||Product code||925425|
|Published||Content info||120 Pages
Delivery time: 2-3 business days
|Residential Real Estate Market in United States - Growth, Trends and Forecast (2020 - 2025)|
|Published: February 1, 2020||Content info: 120 Pages||
The U.S. economy is performing well currently supported by healthy job growth, corporate tax reforms, and improved consumer and business confidence. Sustained economic growth, lower interest rates, and a robust labor market have helped the US housing market rebound in 2019. The country witnessed declining interest rates throughout 2019 which provided a boost to the housing market. Factors such as increased job growth and low unemployment levels also contributed positively to this rising demand for houses.
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.
The mortgage rates in properties have increased since 2018 which is affecting the affordability of homebuyers. Although the higher rates have negatively impacted homebuyer affordability, the increase in the number of household formations is expected to increase the demand for rental houses as it is more affordable. Single-family rental demand is also expected to increase in the country the most and it constitutes nearly one-third of the rental market in the country.
Population shifts is also expected to be one of the long-term drivers for the housing market in the country. Currently, there are more than 65 million Americans between the ages of 20 and 34 entering their prime household forming years, who are anticipated to be first time home buyers.
Multifamily Housing To Remain Strong
The US multifamily market is expected to show continued strength in 2019 amid rising demand from younger adults for rental units and rising investor optimism in the real estate sector.
In 2018, the multifamily segment witnessed significant growth in the US market with a 15% jump in apartment transactions totaling nearly USD168 billion. In 2018, there were 285,000 multifamily housing units built in the United States and nearly 276,000 units are forecast to be completed in 2019.
Demand for multifamily housing has been very healthy through this cycle due to various factors. The rising popularity of urban living, combined with the development of new, attractive multifamily communities in the urban and suburban areas is also expected to increase the demand for multifamily in the upcoming years in the country,
Demand For Housing Market To Remain Elevated
As per the US census bureau, the number of household units in 2018 was nearly 138 million. During the first three quarters of 2018, the U.S. created nearly 1.47 million new households on a year-over-year basis which is one of the strongest paces of household formations witnessed since 2005. Single-family and multifamily housing starts also added around 1.0 million new housing units in 2018.The demand for the housing market remained strong in the country due to a healthy economy and positive demographics but the growth in the new supply of houses is beginning to fall slowly.
Millennial employment and wage growth trends are expected to contribute towards a healthy pace of household formations in the upcoming years. It is estimated that household formations will average around 1.22mn per annum through 2028. The positive outlook for household formations is supported by a strong labor market and historic demographic shifts, including the aging of the Millennial generation, which should sustain nearly 1.2-1.3mn household formations per annum going forward.
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.