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The shrinking middle class is having a huge impact on housing

By Patrick following x   2018 May 8, 8:04pm 698 views   4 comments   watch   sfw   quote     share    


What do these income trends mean for housing?

More rental demand and downward pressure on homeownership. With 35% of working-age households earning less than 2/3 of the US median income, compared to 31% in 1970, a lower percentage of households are able to qualify to purchase a home, and thus more will rent.

More demand for lower-priced homes.The lowest-priced homes in the market have even more demand. In most markets, the months of supply and days on market of the lowest-priced homes are extremely low.

Less demand for median-priced homes.The shrinking middle class (down 12% in share of households and 22% in share of aggregate income) creates less demand in the middle of the market.

More high-end home demand.With a larger share of households having more than double the median income and a rising share who are buying later in life due to delays in marriage and having children, a rising percentage of households are buying a more expensive than usual first-time home. In our experience, this isn't showing up in the very highest price points, but rather for homes priced up to 50% higher than the median home price in a market. Home builders in particular have benefitted from this demand, selling higher-density new homes in great locations to first-time buyers.

1   Strategist   ignore (2)   2018 May 8, 8:15pm   ↑ like (0)   ↓ dislike (0)   quote   flag        

Patrick says

It seems more middle income households are transitioning to the upper income tier, rather than the lower income tier.
That is actually a major positive.
2   bob2356   ignore (4)   2018 May 9, 3:56am   ↑ like (0)   ↓ dislike (0)   quote   flag        

Patrick says
The shrinking middle class is having a huge impact on housing

The ;dying baby boomers are going to have a lot bigger impact. Sell before 2025 which will be the beginning of the biggest yard sale of houses in the history of the planet. Most in suburbs and exburbs where the upcoming house buying generation doesn't want to live.
4   Tenpoundbass   ignore (13)   2018 May 9, 8:47am   ↑ like (0)   ↓ dislike (1)   quote   flag        

The problem isn't the shrinking "Middle Class" it's the inflated definition of the "Middle Class"

The Middle Class don't earn $200K between a married couple, that both have to be 6 figure income earners in order afford a $500K house.

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