WASHINGTON (MaceNews) – The latest trove of housing data Wednesday collected by the National Association of Realtors provided more definition to America’s bifurcated housing market, one in which the haves get what they want, expensive houses that are available for sharply escalating prices, and the have nots, the younger generations buying their first home, who are increasingly left out.
Market forces keep Realtors employed, with higher commissions calibrated to those higher prices. The median price skewed upward by the disproportionate number of expensive homes. Overall, closings in August dropped 2.0% in August, an aggregate that tells very little about what’s happening. Those purchases by first-time buyers were only 29% of the total, the least since January 2019
First-timers find relatively few houses in their price range for sale, one of the symptoms of an unbalanced market that’s been the case for years. In this week’s Canadian elections, a surprise issue turned out to be housing, high prices and low availability. Prime Minister Justin Trudeau had expected the big issue would be the government’s campaign to get the populace vaccinated.
Mace News asked NAR Chief Economist Lawrence Yun for what he sees as the big-picture implications of the constant frustration of the housing aspiractions of America’s younger generations.
“The Canadian election shows the importance of housing opportunity in a democratic society,” he responded. “Moreover, one can even say that democracy flourishes where there are large middle-class families, where the middle can be defined with homeownership.”
The latest NAR numbers who houses that sold for $1 million or more were up 40.1% for the 12 months through August. Sales of houses priced from $100,000 to $250,000 plunged 20.3%. Yun says prospects for the first-timers will only worsen as time goes by and mortgage rates increase.
“If first-time buyers are squeezed out continuously then a country’s wealth division between haves and have-nots widens,” Yun continued, “which is a recipe for greater political and economic disgruntlement.”
How soon does housing erupt into a “surprise” issue in the U.S as it did in Canada? No one knows. Signs are that since those who can wield the greatest influence, those in the older generations who aren’t seeing a housing shortage or any big affordability crisis, aren’t pushing for change in any national housing policy.
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Contact this writer: denny@macnews.com.
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