Welcome to today’s real estate news roundup! In California, Accessory Dwelling Units (ADUs) have become increasingly popular as a solution to the state’s soaring home prices. A recent study reveals that ADUs accounted for 20% of new home construction in 2023, highlighting the demand for alternative housing options. Meanwhile, Forbes Advisor explores the housing market predictions for 2024 and discusses the challenges faced by homebuyers in the current market. On another note, the Home Building Geography Index (HBGI) provides insights into housing construction growth across various submarkets. Additionally, CNET Money delves into how brand-new homes are transforming the housing market by providing access and affordability amidst low inventory and high prices. Lastly, Bankrate addresses concerns about a potential housing market crash, assuring readers that experts believe a significant price decline is unlikely due to various factors. Dive deeper into these stories by clicking on the links below.
ADUs Accounted For 20% Of California’s New Home Construction In 2023
Accessory Dwelling Units (ADUs) have surged in popularity in California. With the median home price reaching $900,000, both citizens and legislators are seeking alternative housing solutions. A California Department of Finance study reveals that ADUs accounted for 20% of new home construction in 2023.
This means one in every five homes built in California last year was an ADU, doubling from 2020 when only one in 10 new homes was an ADU. The newfound popularity of ADUs proves that necessity is the mother of invention. California home prices have been relentlessly marching towards unaffordability for the past several decades, and a lack of inventory is one of the main contributing factors.
While homeowners benefit from rising home values, the $900,000 median price effectively locks out all but the most affluent buyers. Public servants such as teachers, first responders, and government employees in cities like Los Angeles or San Francisco are moving further away from the communities they protect to keep pace. The current high interest rates only limit their buying power even further.
Housing Market Predictions For 2024: When Will Home Prices Be Affordable Again? – Forbes Advisor
What many had hoped would be a rosy spring home-buying season has turned into a thorny challenge for home shoppers already demoralized by a challenging market. Home sale activity was stagnant last month as mortgage rates and home prices maintained an upward trajectory. One silver lining is that more resale inventory entered the market, which should help rein in home price growth, at least to some extent.
Even so, experts say the market will only see momentum return once mortgage rates drop low enough to make homes more affordable and incentivize homeowners locked in at cheap rates to move. Experts insist the housing market will improve. Unfortunately, hopeful buyers continue to see a delay in this transformation, thanks partly to inflation, which is taking its sweet time cooling off, further delaying the Federal Reserve from cutting the federal funds rate.
Home Building Geography Index (HBGI) | NAHB
The Home Building Geography Index (HBGI) is a quarterly measurement of building conditions across the country and uses county-level information about single-family and multifamily permits to gauge housing construction growth in various submarkets. The HBGI for the first quarter of 2024 focuses on the population density-based delineation of home building that has been the mainstay of the HBGI.
I Found Out Why Brand-New Homes Could Transform the Housing Market – CNET Money
As a personal finance writer covering the housing market, I often hear that building a brand-new home is pricier, complicated, and more limited than buying an existing one. However, in the current real estate market, where low inventory and steep prices are keeping many buyers locked out, new construction is providing access and affordability. Some homebuilding companies are offering buyers financial assistance with closing costs or lower mortgage rates for the first few years of the loan. Others are focused on building smaller, more energy-efficient homes that will save homeowners money in the long run.
New construction has become an increasingly popular option, accounting for more than 30% of the single-family home market. Many prospective homebuyers are waiting for mortgage rates to drop, but even that wouldn’t fix today’s affordability crisis. Housing affordability conditions can only moderate with the construction of affordable, attainable supply. New energy-efficient homes are also more sustainable and can help homeowners save on utility bills.
Is The Housing Market Going To Crash? | Bankrate
To the dismay of would-be homebuyers, property prices just keep rising. Despite high mortgage rates, home prices have continued to climb, with median existing-home prices up 5.7% over last year. The ongoing shortage of homes for sale and strong demand contribute to the affordability squeeze. However, experts agree that a housing market crash is unlikely. Factors such as strong personal balance sheets, cautious pace of construction, and a lack of risky mortgages make a significant price decline improbable. While home prices may plateau, a complete collapse like the Great Recession is highly unlikely.