Dive Brief:
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Of the 132.42 million homes in the U.S. in 2011, 98.8% were still standing in 2013, according to a 2016 report from the Department of Housing and Urban Development.
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Based on data from the American Housing Survey, the report found that most homes were lost due to demolition and disaster, becoming damaged or condemned, being put to non-residential use, moved (in the case of mobile homes) or being converted or merged with another unit.
- Between 2011 and 2013, 1.567 million housing units were classified lost, or 0.59% annually.
Dive Insight:
In its analysis of the HUD data, the National Association of Home Builders noted that the likelihood of a home falling out of use depends in great part on typology. Because they can be more easily moved from their original location, mobile homes are more likely to be labeled lost than single-family detached homes, for example. Of the 1.567 million units lost between 2011 and 2013, fewer than half were single-family detached, at a rate of 0.45% annually.
A home’s age is also a factor. Homes built before 1950 are today lost at almost double the rate of homes built in the 1990s, due primarily to the age and viability of the structure. This suggests that half of the homes built after 1950 will be standing in 66 years, the NAHB explained, and that homes built today will have similar longevity.
Meanwhile, a shortage of new and existing homes plagues the market as the largest generation yet eyes homeownership. Zillow reported that housing inventory was down 5% in August 2016 year over year, despite a slight uptick since the beginning of 2016. Its own housing inventory report, real estate website Trulia said inventory was down 6.7% in the third quarter of 2016 from a year ago — the fifth-straight quarter of decline — with starter (-10.7%) and trade-up (-9.2%) home inventories especially affected.
Rebuilding inventory requires more existing homes to be put on the market, and for builders to commence new construction on single-family properties priced to attract young, first-time buyers. Existing-home sales dipped 0.9% between July and August 2016 and are only slightly outpacing (0.88%) the year-over-year gains; meanwhile housing starts fell 5.8% in August, with single-family experiencing the biggest losses.
Meeting the needs of entry-level buyers is key to the housing market’s recovery. “Everything in the housing market is a ladder,” NAHB Chief Economist Robert Dietz told Construction Dive earlier this month. “If you have blockages anywhere along that ladder, it’s going to be difficult to get a full operation of the market. We need some additional inventory on the existing side to get those Gen-Xers who currently occupy an entry-level home to want to buy a larger, new home. They’re going to have to put their home on the market for that millennial to buy, and that’s going to be a bit of a challenge going forward.”