October 15, 2020
There’s No Place Like Home: Housing market gets unexpected lift in 2020
by Erin Johnson
Many of us are working, teaching and finding respite in our homes. With that, comes the inevitable survey of the space we have to fit our new way of living. While the uncertainty of the spring months caused a downturn, or pause, in the housing market, things have more than recovered.
According to a recent article published by Hanley-Wood Construction Wire, new home sales reached 1 million in August – a first in more than a decade. The study credits demographic tailwinds with millennials getting married and starting families, historically low mortgage interest rates and “a stronger relationship with our home” as the three key drivers for the recovery.
What are homebuyers looking for?
Despite early reports of a mass migration from cities, that seems to have been overexaggerated when, in fact, both urban and suburban homes are selling more quickly than they were in February, according to Zillow. One small noticeable change is that single-family home values are growing slightly faster (up 4.4% year over year) compared to condo values (up 3.1% year over year).
But one thing seems to be consistent across the board: buyers want more indoor and outdoor space. For example:
- 21% of respondents in a Redfin survey wanted both a dedicated area to work from and more outdoor space.
- People are less in love with the open concept, wanting more closed off, defined spaces or “Zoom rooms” to work and learn, according to interior designers in a recent Forbes article.
- Experts say that whether in the city, suburbs or rural areas, the “quilting together” of indoor and outdoor spaces is becoming increasingly important.
The process of buying a home is looking different too. The first thing to note is that anyone looking for a new home will be faced with competition with many markets reporting lower levels of inventory, and more demand. And it might be more difficult to get approved for a mortgage as some lenders increase credit score requirements.
Zillow has also reported that virtual buying and selling is on the rise in an August survey
Continued opportunities in the renovation market.
- 36 percent of Americans would be more likely to try to buy a home entirely online during the current coronavirus outbreak; 43 percent would be more likely to try to sell a home entirely online.
- 1 out of 3 would prefer taking a virtual or video home tour instead of touring a home in person after the current coronavirus outbreak ends.
Just as the housing market is on the upswing, data is showing a continued interest in renovation. More than 76% of homeowners in the U.S. have carried out at least one home improvement project since the pandemic began and 78% have at least one home improvement project planned in the next 12 months. Top projects, according to Porch.com,
include anything that involves getting outside, such as changes to the exterior, garden or patio. And 34% of respondents (and 50% of millennials and Gen Z) have made their homes more environmentally friendly.
This is all good news for our industry. Whether people are building, moving or renovating in place, there’s a definite drive toward blending indoor and outdoor spaces with high-performance fenestration products. The great unknown is whether the economy will continue to help us trend in the right direction. Only time will tell, but there’s reason to be optimistic and to seize opportunities.
Questions or comments? Email me directly at Erin.Johnson@Quanex.com
For more information about Quanex visit www.quanex.com
October 15, 2020 by Erin Johnson
Filed under: housing