Overview of the US residential real estate market 2021-2026 | Key companies in the fragmented sector are Equity Residential, Brookfield, Essex Property Trust and Simon Property Group
DUBLIN, December 09, 2021– (BUSINESS WIRE) – The report “US Residential Real Estate Market – Growth, Trends, COVID-19 Impact and Forecast (2021 – 2026)” has been added to ResearchAndMarkets.com offer.
The US residential real estate market is expected to grow at a CAGR of 5.77% by 2026. With the favorable economic environment expected to continue in the country, the US real estate market is expected to experience modest residential real estate growth in 2020 and 2021.
Demand continues to increase sharply. Existing home sales rose 10.5% year-on-year to a seasonally adjusted annual rate of 6 million units in August 2020, according to the National Association of Realtors (NAR). Likewise, new homes sold climbed 43.2% year-on-year to a seasonally adjusted annual rate of 1,011,000 units in August 2020, according to the US Census Bureau.
Despite this, construction activity remains weak. In August 2020, building permits authorized for new homes were down 0.1% year-on-year, according to the US Census Bureau. Housing starts rose 2.8% while completions declined 2.4%.
The COVID-19 crisis strongly impacted the residential real estate market this spring. Health concerns and stay-at-home orders have led to fewer home buyers looking for homes and fewer sellers willing to list their properties or allow strangers into their homes during a pandemic.
Multi-family housing will remain strong
Multi-family housing grew in importance during the great financial crisis and continues to grow due to the influx of millennials into the market. When the housing market collapsed in 2008, construction of new homes of all types (single-family, multi-family, mobile homes, etc.) was affected.
Multi-family tenure has held up particularly well since the Great Recession, hovering around 95%, and several factors explain why. Supply has caught up for much of the past decade, as almost nothing was built as the Great Recession began to recover, with funding so hard to come by. The high price of homeownership for many is another factor, with the homeownership rate remaining well below its all-time high. In addition, the new apartment properties are targeting a new market. A new generation of tenants has emerged at the top of the market; Class A, downtown or prime suburban properties are likely beyond the reach of tenants in existing and older units. A substantial number of completions and low absorption in the fourth quarter of 2020 resulted in an increase in the year-over-year vacancy rate in major metropolitan areas. But signs of recovery are on the horizon. 2021 is expected to see a high absorption rate over 20 years as the pandemic abates and pent-up demand drives the recovery.
The pandemic is not slowing down construction. Approximately 81,000 units were completed in the fourth quarter of 2020, compared to 77,000 in the fourth quarter of 2019. The markets with the highest completions (relative to inventories) in the past four quarters are scattered across the United States.
Demand for the housing market to remain high
The American dream of homeownership has not been held back by the Covid-19 pandemic and the economic downturn it has caused.
In the fourth quarter of 2020, there were approximately 82.8 million owner-occupied households in the United States, according to recently released data from the Census Bureau. The number of owners increased by approximately 2.1 million compared to the previous year. Based on unadjusted fourth quarter data, this corresponds to the largest previous net increase in the number of homeowners that occurred during the housing boom between 2003 and 2004 (2.1 million).
Part of the growth in home ownership has been attributed to the overall growth of the economy and the number of households in the United States over time. The addition of 2.1 million homeowners in 2020 represents an annual increase of 2.6%. This is the seventh largest percentage increase in the number of homeowners since 1965.
The boom in homeownership has also boosted the homeownership rate. In the fourth quarter of 2020, 65.8% of households owned their home, up from 65.1% a year earlier. This 0.7 percentage point increase in the homeownership rate is not the largest on record (the rate increased 0.9 percentage points from 1994 to 1995), but it is nonetheless significant.
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 almost 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 top companies include Equity Residential, Brookfield, Essex Property Trust, and Simon Property Group.
Greystar real estate partners
Simon Real Estate Group
Mill Creek Residential
Lincoln Real Estate Company
The Michaels organization
Essex Real Estate Trust
RE / MAX
Keller Williams Realty, Inc.
Current economic scenario and consumer sentiment
Residential Real Estate Buying Trends – Socio-economic and Demographic Insights
Government initiatives, regulatory aspects of the residential real estate sector
Mortgage size and loan-to-value ratio trends
Interest rate regime for the general economy and mortgage loans
Rental yields in the residential real estate segment
Capital market penetration and the presence of REITs in residential real estate
Affordable housing support provided by government and public-private partnerships
Real estate technologies and startups active in the real estate segment (brokerage, social media, facilities management, ownership)
For more information on this report, visit https://www.researchandmarkets.com/r/byd1vy
See the source version on businesswire.com: https://www.businesswire.com/news/home/20211209005442/en/
Laura Wood, Senior Press Director
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