Home & Community | Intelligent Horizons, Inc.

In 2004, the Census Bureau reported that 69% of all single family homes in the United States were owner-occupied – the highest percentage reported since 1980. According to the National Association of Home Builders the rate has risen 5 % in the last ten years.

In 2004 , 8 million new and existing homes were bought and sold in the U.S. According to the Census Report, new single home construction in the first half of 2005 is on track to reach 2 million units--well above the 1.6 million built in 2004 and above the 1.5 predicted for 2005. Predictions for 2005 were based partly on rising interest rates affecting first-time buyers and partly on home ownership rate drops reported in the third quarter 2004 among a group associated with first-time buyers, the 35-44 age group and those under 35.

First time buyers are the ones most affected by interest rates. Housing remains strong when there is job growth, increased household income, consumer confidence, and population growth.

Some factors to consider include:

• The immigrant population has grown 24.6% since 1990 to 9.1 million

• Only 46% of Hispanic households and 48% of black households live in their own homes

• In the next ten years, 4.25 million to 4.5 million Americans will enter their 50s - a market that buys

• This year mortgage payments represented 19% of a family's household income. In 1980, it represented 31%

• On the investment side, stock market returns and savings rates continue low, while home owners can realize tax free gains on the first $500,000 of profits from the sale of a home

• Sales have been brisk in part, where supply is tight. Prices rise when demand is high

The National Association of Realtors expects the median new-home price to rise 5.8% to $215,850 in 2005 compared with 2004's 8.9% jump to $214,600. Estimates will vary depending on how hot specific markets are, and the state of the economy. In Washington, DC, the third quarter 2004 median price of a home was 22.3% higher than the year before. The capital area was 14 th among the nation’s leading metro areas.

The Federal Deposit Insurance Corporation (FDIC) recently identified 55 metro areas where price appreciation had reached “boom” proportions by the end of 2004. Home builders have been taking steps to curb speculative home buying by investors in the nation’s hottest housing markets, according to a series of surveys conducted by the National Association of Home Builders (NAHB)

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