We love looking at data for the purpose of understanding opportunities, information and interesting or relevant market research, and today we decided to look back at the recent census data as we approach the 2020 census. We love to see if we can find opportunity within the United States Census of last decade and we just might have in the 2010 census. I will explain why the 2010 Census may have warned us of coming housing affordability issues.
Increasing Interest Rates have helped made buying a house more expensive over the past few years, but hardest hit are those looking for loans for a mortgage and a different factor is playing into the demand and supply mechanic in housing markets, and making houses unaffordable.
Demand and Supply
To remind you, demand and supply is the essential dynamic in the relationship of a seller and a buyer in commercial activities. The supply and demand contribute to the price of a commodity or asset. In the United States housing sees a steady demand but the swell in the market may be due to supply shortages.
According to the 2010 Census, more than 88% of housing in the United States is occupied and a higher 91% of housing in California being occupied.
Availability of Housing
Property Development in Concentrated Areas has switched from home units to apartments, condominiums, and studios. Housing is just to expensive in developed areas.
Interest rates are steady but may continue on the rise, making houses a little more expensive, due to the interest. This could lower the demand for housing for some period or increase the supply with many trying to cash out on their appreciated asset. If you were looking for opportunity to make money; the housing market might have been able to offer that as we approach the future. According to page 39 of the 2010 census, the data present there shows that around 88% of available housing in the United States is occupied, will this trend to continue into 2020 and beyond?
As a large amount of millennials continue to live at home, some assume this may contribute to lower housing demand in the future, to allow prices to come down or stabilize. While others see the occupation rate as evidence that few of the millennial generation will own houses. Other beliefs revolve around the fact that houses will be inherited and this rate will only come down with investment in housing construction. Predictions have also claimed low birth rates in this generation will lead to less occupation of housing in the future, and therefore bring prices down. Prices can still be found cheaper just outside inland suberbs and metropolitan cities, but the direction of the housing market remains to be seen as we realize what impacts the country and market will endure.
Further, more than 90% of available housing in California is occupied. As this number increases, the chances of demand not being met could increase prices and make home ownership for incoming generations very out of reach. The market is already competitive with some areas seeing prices up in the millions such as San Francisco, Sacramento, Los Angeles, coastal areas and others.
I will develop this article with info from the census prior to that of 2010 to find a rate of change and wait to see in the 2020 census and following years, how the percentage changed. Later, I can look at differences in population and form a guess on whether or not this threat will still remain if we have a similar population size on the most recent census compared to that previous.