Relocation in the U.S.: State of the Real Estate Market
I recently attended a presentation given by Relocation Directors Council (RDC) and Cartus Broker Network members Carol A. Kelly and Annie Hamilton, on National Market Trends and Topics. The informative session covered news and trends helpful to companies relocating employees in the U.S., including relocation trends, the state of the U.S. real estate market, and regional statistics on real estate prices, sales, and the rental market.
The RDC provides up-to-date real estate market information, including median sales prices, active listings, days on market, and more, and its members are recognized leaders in the relocation industry.
Among the highlights of their presentation were:
- Existing home sales in September were up 10.3% year-over-year, with the West (+11.3%) and Midwest (+10.9%) leading the nation.
- Existing home prices have started to moderate and were up 5.39% across the U.S., led by the West at +7.7%. Across the U.S., home prices are down 9% from the April, 2006 peak, with 15 states at or beyond previous peak pricing.
- Homes in the $750K-1M range had the highest year-over year sales change through August (+27.2%).
- Inventory levels remain low (hovering around five months), and buyers will see fewer choices through the end of the year. Lower inventory is pushing prices up, which impacts affordability for buyers.
- Mortgage rates are projected to rise slightly but still remain historically low. As interest rates rise, borrowers’ buying power is impacted. A 1% rise in interest rates lowers affordability by roughly 10%, so buyers would either need to get the price lowered, or put an additional 10% down to keep the mortgage affordable.
- Homeownership rate fell to 63.4% in the second quarter, the lowest rate since 1967.
- The number of renters is increasing, but so are rental costs; typical rent rose 15% over the past five years, while the income of renters grew by only 11%.
As the U.S. housing market continues its recovery, relocation managers should review their policies and adjust areas such as marketing incentives and guidelines. For employees moving from more stable markets into hot real estate markets with elevated costs, acting quickly to secure desired properties will be key, so transferring employees should be counseled to get approved as early in the relocation process as possible.
We will continue to keep you updated on the improving U.S. real estate markets and economic outlook. For more key market trends and best practices that you and your relocating employees need to know, keep an eye out for our next quarterly U.S. Market Watch, coming in January.