Like many industries and markets, the residential real estate market was adversely affected by the pandemic. However, despite this disruption, the housing market is resilient with increasing homeownership in this sector. Industry reports actually see a rise in revenues through 2028. One such report from IBISWorld projects that the housing developers market size, measured by revenue, of the Housing Developers industry is expected to reach or exceed $202.7 billion in 2023. It added that: “A rising homeownership rate indicates growing consumer preference toward purchasing property rather than renting, increasing demand and industry revenue. The homeownership rate will increase in 2023, representing a potential opportunity for the industry. The residential real estate market in the United States is expected to register a CAGR of over 5.77 percent during the forecast period. Furthermore, the COVID-19 impact was severe on the market. Despite the pandemic crisis, residential real estate in the country is in the recovery phase, as the sales in the country quickly bounced back to pre-pandemic levels.” Another report from Mordor Intelligence added: “Since the start of the COVID-19 pandemic, the property market in the United States has been thriving. Many purchasers took advantage of the low-interest rates to restructure their mortgages, relocate, or take a step toward the American Dream by purchasing their first home. Owing to this, the number of home sales increased sharply…and has since stayed higher than before the pandemic. Prior to the pandemic, home prices had been on the rise, but with demand at an all-time high in 2020, the Freddie Mac House Price Index recorded a startling 11.3 percent increase.” Active companies in the markets this week include Lennar Corporation, Toll Brothers, Inc., International Land Alliance, Inc., KB Home, PulteGroup, Inc.
At the beginning of 2021, about 60 percent of properties were sold above their advertised prices as a result of the ‘race for space’ among homebuyers. Although the market has begun to moderate, the lack of available inventory and rising construction costs are anticipated to keep pushing up the price of homes. The price of single-family homes increased by more than 20 percent in numerous states of the United States. As of the end of 2021, some of the states with the highest property appreciation rates were Arizona, Utah, Idaho, Florida, and Tennessee. Furthermore, the mean value of a single-family home was significantly higher than the average sales price of both new homes and existing homes in states like California, Washington, and Massachusetts.
