Homebuyer Market Insights

You want to know where real estate demand is headed? Look at this chart: This data allows us to make a fairly safe assumption about where demand is headed over the next decade. Here's what you need to know: The oldest Americans are about to surge. Between 2025 and 2034, the U.S. will add: • 3.9 million people aged 75-79 • 4.2 million people aged 80-84 • 4.1 million people aged 85+ That's over 12 million new Americans in the age ranges that need assisted living and memory care. This isn't a maybe. This is happening. The oldest Boomers are aging into their late 70s and 80s. And that's exactly when people need senior housing. Active adult communities are in trouble. Here's the problem: Active adult communities target people in their 60s and early 70s. People who want to downsize but aren't ready for assisted care yet. But look at what's happening to those age groups: • Ages 55-59: down 0.8 million • Ages 60-64: down 2.1 million • Ages 65-69: down 0.8 million That's nearly 4 million fewer people in the prime active adult demographic. Why? Gen X is too small. They can't replace the Boomers who are aging out of this segment. So while active adult communities won't disappear, they're going to struggle. The customer base is literally shrinking. The children's market is also shrinking. It's not just active adults. Younger age groups are declining across the board: • Ages 0-4: down 0.3 million • Ages 5-9: down 1.5 million • Ages 10-14: down 1.7 million • Ages 15-19: down 1 million What does this mean? Fewer kids. Fewer teenagers. Less demand for schools, daycare centers, and family-sized starter homes in the suburbs. The family housing market won't crash. But it won't be the growth engine it once was. If you want to understand where real estate demand is headed, follow the demographics. The next decade will be defined by: 1/ Explosive growth in memory care and assisted living (75+) 2/ Shrinking demand for active adult communities (55-74) 3/ Declining youth and family markets There's one clear winner: senior housing for the oldest Americans. The chart tells you everything you need to know.

The Evolving Face of the US Homebuyer The National Association of Realtors' (NAR) 2024 report provides a fascinating snapshot of the US housing market’s buyer profile that looks significantly different than it did just a few years ago. The data reveals a changing homebuyer. The average buyer age has climbed to a record 56, underscoring the impact of high housing costs and rising interest rates that have sidelined younger would-be buyers. For first-time buyers, the average age is now 38, nearly a decade older than it was in the early 1980s. These changes signal a more mature buyer who brings accumulated wealth and likely more significant financial security to the table. Additionally, a fifth of all home purchases were made by single women, a notable demographic shift reflecting both a societal change in homeownership goals and an economic shift in who can afford to buy. By contrast, single men comprised only 8% of recent buyers. This snapshot highlights what many are calling a “bifurcated housing market,” where those able to buy homes are increasingly established, wealthier individuals, often using home equity from previous properties to secure cash purchases or make substantial down payments. This market has been largely inaccessible to younger buyers, who continue to face affordability challenges, limited savings, and reduced opportunities for financial support in the form of lower mortgage rates. With affordability gauges near record lows, first-time homebuyers hold a mere 24% share of the market, down dramatically from the 40% share held in pre-Great Recession years. Rising prices and interest rates have compounded these barriers, leading to a market where nearly three-quarters of all buyers have no children under 18 at home, reflecting an older and more established buyer profile than in decades past. While this report offers a look back, the trends it captures underscore a potential turning point. Recent mortgage application data suggests that prospective buyers who had previously been priced out or sidelined may begin to re-enter the market as interest rates stabilize. If these sidelined buyers do return, particularly younger and more diverse demographics, the profile of the typical buyer could again start to shift, gradually increasing diversity in age, household composition, and race among homebuyers. At Havas Edge, we’re continually analyzing these demographic shifts to support brands in delivering timely, targeted strategies that meet the realities of today’s buyers and the anticipated resurgence of those who’ve been waiting on the sidelines. #RealEstate #Homebuyers #MarketTrends #HousingEconomics #ConsumerInsights

Lower Rates Brings Hope for New Homeowners, MBS securities & Housing Market As rates decline, homeownership becomes more attainable. Lower rates = greater affordability, existing home resales, new housing starts, and increased volume for mortgage originators. Mortgage rates more than doubled in recent years to >7% from 3.5%, but the mortgage industry is grateful that rates have gradually begun to decline. With the recent rate rally, the 3 largest holders of MBS: banks, Federal Reserve, and insurance companies are seeing improvement in their investment books. The big 3 hold these assets at cost as they don’t incur marked-to-market losses and are exposed to net interest margin or NIM., They take the hit as they hold low coupon MBS vs. higher cost of funding. This hit to NIM should start to dissipate as the Fed reduces the Fed Funds rate next month, bringing down SOFR and cost of funds. This week, mortgage rates fell to its lowest rate in nearly 2 years, but even with this rate decline, only 8% of the residential mortgage universe can currently refi (up from 0% last year) with 92% that remain out-of-the money. What drives 30-year mortgage origination and housing activity is not Fed Funds, not SOFR, since long-duration 30-years MBS is spread relative to 10yr UST rate. The yield curve will matter, but it’s step in the right direction. Ginnie Mae 30YR MBS Balance, by Coupon

Housing Demand Shows Resilience Despite Higher Mortgage Rates Pending home sales jumped 3.8 percent in May, more than triple the median consensus expectation of a 1 percent increase and marking another positive sign for housing demand. Contract signings were also nearly 5 percent higher than a year ago, extending the gradual improvement in buyer activity. Because pending sales are based on signed contracts rather than closings, they provide an early indication of existing-home sales activity over the next one to two months. The latest increase adds to a growing list of indicators suggesting that housing demand has firmed this spring. Mortgage purchase applications, another leading indicator of home sales, have been trending higher for several months. Together, rising purchase applications and stronger contract signings suggest that buyers and sellers are becoming more willing to move off the sidelines. What makes the recent improvement particularly noteworthy is that it has occurred despite mortgage rates moving higher through much of the spring. Mortgage rates increased between March and May, reversing some of the affordability gains that emerged earlier in the year. Under normal circumstances, higher financing costs would be expected to dampen buyer demand. Instead, many households appear willing to move forward with purchases as inventory improves and the reality of higher-for-longer mortgage rates becomes more widely accepted. The resilience in demand reflects several factors. Pent-up demand remains significant after years of constrained affordability and limited inventory. At the same time, the supply of homes for sale is modestly higher than it was a year ago, giving buyers more options and greater negotiating power. Affordability conditions, while still challenging by historical standards, are also better than a year ago. Mortgage rates remain below year-ago levels, income growth continues to outpace house-price growth, and slower price appreciation has helped improve purchasing power at the margin. The latest data suggest the housing market continues to move gradually in the right direction rather than staging a rapid rebound. Activity remains low relative to historical norms, and elevated mortgage rates and the persistent lock-in effect will continue to constrain market activity. Nevertheless, improving inventory, modestly better affordability, and persistent pent-up demand are providing enough support to keep buyer demand moving in a positive direction, even in the face of higher borrowing costs.

Builder confidence just took another step down — and the “why” matters more than the headline. The NAHB/Wells Fargo Housing Market Index fell to 34 in April, reflecting weaker current sales, softer six‑month expectations, and very light buyer traffic. This isn’t a collapse in demand. It’s a market where affordability friction is shaping behavior. Rates remain elevated, buyers are more deliberate, and builders are adjusting rather than pushing prices aggressively. That adjustment shows up in the details. About 36% of builders cut prices, with an average reduction of 5%. Sales incentives are still being used by 60% of builders — the 13th straight month at or above that level. Price discipline is tightening, but flexibility hasn’t disappeared. For buyers, this means new construction remains one of the more negotiable parts of the market, even as conditions vary widely by location and price point. For builders, it’s a reminder that meeting buyers where the affordability math actually works is now the central challenge. The key takeaway is that this is a cooling driven by constraints, not by lack of interest — and markets that adapt fastest to buyer math will clear first. What I’ll be watching next is whether improving affordability math, through rates, incentives, or incomes, brings buyer traffic back before builder confidence follows. #HousingMarket #HousingData #ResidentialEconomics #Affordability #Inventory #HomeBuilding #RealEstateInsights

What has been the impact on the US housing market from the fastest tightening to interest rates since the late 1980s? - A lift in borrowing rates to their highest levels since 2000 - However, the pass-through of interest rate hikes to indebted consumers has been minimal (outstanding mortgage rates have only increased by 0.43% versus a 5.25% increase to interest rates) because more than 95% of US home loans are on long-term fixed mortgage rates. - The impact on new borrowers is significantly different. New borrowers are paying nearly 30% of their income on their mortgage, up from an average of 15% in the last decade. - The tough conditions for new borrowers have led to a significant slowing in lending and refinancing activity. Residential construction has also taken a hit. - However, GDP growth has held up thanks to strong consumer spending from a strong labour market and as households spend by drawing down on their savings buffers. - Housing construction is not keeping up with demand and is leading to housing undersupply which is contributing to higher home prices and worsening affordability. See more in this #econosights https://lnkd.in/g9wWZvvY

🏘️ Housing starts, or new home construction, fell 3.1% in October to the lowest level since July, missing expectations. Single-family starts drove the losses; multifamily posted gains. Compared to a year ago, starts are down across the board as higher interest rates and supply-side constraints on building sideline contractors. Single-family starts fell 6.9% to just under one million units. That has been the upper limit to how much builders can produce in a year, given ongoing worker shortages, tight lending conditions and high material and land costs. Mortgage rates climbed to the highest level since July in November and are not expected to fall significantly before year-end. Demand is flattened when rates rise, especially this quickly. Prospective buyers are waiting even longer to enter the housing market; the median age of the first-time buyer was 38 years old in 2024, the highest on record. Builders have played a key role in moving downscale and trying to service the pent-up demand of first-time buyers. The falls in single-family starts in the South and Northeast were the largest. The drop in the South, the biggest construction region, was exacerbated by disruptions from Hurricanes Helene and Milton. Home building and materials stores have reported a pickup in spending as repairs get underway. That suggests we will see some catch-up soon. However, we do not expect to see the same level of rebuilding we once did due to lack of insurance. Add in the breadth of devastation and many will likely relocate. Multifamily starts for five units or more jumped 9.8% in October, but from a very low base. Starts are 12.6% lower than a year ago and not expected to regain ground next year. Builders have pivoted away from multifamily construction as they complete backlogs. There were 804,000 units under construction in October, lower than the one million record hit in 2023, but still above pre-pandemic averages. Building permits, which signal future plans, slipped 0.6% on lower multifamily permit applications. Single-family permits eked out a 0.5% gain but multifamily dropped 3%. Lack of multifamily units in the pipeline suggests rents will rise again by the end of next year. Builders’ sentiment has gained ground recently but remains in pessimistic territory. According to the National Association of Home Builders, they are still concerned about sales conditions and foot traffic but are starting to feel optimistic about sales prospects in the next six months. The new optimism relies heavily on lower mortgage rate expectations. #Housing #Construction #Hurricanes #Rebuilding Read more: https://lnkd.in/gKP2VKMQ

While existing-home sales dipped 2.4% in June to a 4.09 million annual rate and prices rose 1.8% year-on-year to a new all-time high of $440,600, there are more interesting stories under the hood about regional and sector performance: > It may not seem like it to frustrated buyers, but affordability is quietly improving. The Housing Affordability Index rose to 102.3 versus 95.5 a year ago - even as the median price hit a new record. Wage growth is outpacing price growth across every region, with the South and West posting affordability gains over 8%. > Regional sales divergence: The Northeast was the only region where sales rose month-over-month (+2.1%), while the Midwest, South, and West saw declines. For single-family homes, sales were flat in the Northeast and fell in the other regions. For condos, however, sales jumped in the Northeast (+14.3%), were flat in the West and fell in the Midwest and South. > Regional price divergence: All regions saw year-on-year increases, with the West and Northeast rising faster than the national rise of 1.8%. For single-family homes, the Northeast and Midwest both saw prices rise faster than the national increase of 1.8%. For condos, the West, Northeast and Midwest all saw price increases faster than the national rise of 1.6%. > Sector inventory divergence: Whereas single-family inventory rose moderately to yield 4.6 months of supply, for condos it plummeted nearly 30% both m/m and y/y to 4.7 months of supply - the lowest since 2024. During June, the typical single-family home sold for nearly 17.5% more than a condo/coop. > In summary, the Northeast is the only region with positive monthly sales momentum, but it's also seeing the sharpest price acceleration (+3.9% y/y), suggesting a market where limited inventory is pushing both sales and prices up together. Meanwhile, the South is the mirror image, showing the steepest sales pullback (-3.6%) paired with the softest price growth (+0.9%), indicating that supply has caught up enough there to cap appreciation. > First-time buyers are stepping back, at least for now. They made up 33% of June's transactions, down from 35% in May, and likely due to mortgage rates trending higher. Will they return? That depends on the strength of the job market, which continues to plod along. We'll find out more on the housing market's health when the NAR's Pending Home Sales Index for June is released next week, and then what that translates into sales closings for July. Link to report in comments. #RealEstate #HousingMarket #EconomicData #NAR

Everyone talks about Aging America. Fewer people are asking: where are the future households coming from? This map shows the population under age 18 by county. If the 65+ map tells us about wealth stability and capital concentration, The under-18 map tells us about formation, absorption, and long-term demand. A few observations: ✅Strong youth concentrations are visible across Texas, parts of the Mountain West, Inland California, and select Southeast markets. ✅Many suburban rings show higher under-18 shares than their urban cores. ✅Some legacy metros show noticeably thinner pipelines of future household formation. For real estate, this isn’t about schools or playgrounds. It’s about the next 10–20 years of: ☑️Rental absorption ☑️First-time homebuyer depth ☑️Workforce base expansion ☑️2–3 bedroom product demand ☑️Retail and service ecosystem durability Demographics move slowly. But once they compound, they’re incredibly hard to reverse. A market heavy in seniors can signal stability and accumulated wealth. A market heavy in youth can signal expansion and long-term formation. The strongest markets often aren’t the oldest or the youngest; they’re the ones with generational balance. Source: U.S. Census Bureau, American Community Survey (ACS) 5-Year Estimates (2024); visualization via Rural Health Information Hub (RHIhub). #RealEstate #Demographics #Multifamily #MarketResearch #LongTermInvesting

By 2030, mortgage applications as we know them will be dead. Replaced by AI operators. In 5 years, most consumers won't apply for mortgages themselves—their personal AI agents will do it for them. Here's what this means for your business: 1. AI operators are the new gatekeepers These aren't fancy chatbots. They're software that uses websites exactly like humans do. Seven weeks ago, they barely existed. Today, you can watch them book flights on Expedia—clicking buttons, filling forms, comparing options—exactly as you would. Your point of entry is about to fundamentally change. 2. How AI operators will transform the mortgage applications When a consumer deploys their operator, they'll simply say: "Find me the best mortgage options for a $400,000 home in Charlotte. I have 20% to put down. Don't share my Social Security number yet, but get preliminary rates." The operator will then: • Visit multiple lender websites simultaneously • Complete application forms up to the SSN requirement • Extract rate information and terms • Compare closing costs and fees • Present only the top options to the consumer The mortgage companies that don't appear in this final comparison might as well not exist. And here's the kicker—consumers will soon have multiple operators: • A mortgage operator • An insurance operator • A real estate operator These will communicate with each other, making integrated decisions that you never get a chance to influence. 3. What this means of your mortgage company What makes this dangerous? You won't even notice it's happening. If your systems don't communicate with operators effectively: • Your leads drop from 8 to 7 per month • Then 6 the next quarter • Then 5 six months later You'll blame the market. Your loan officers. Your marketing team. But it's none of those things. 4. The operator-ready mortgage company If you think 10% of consumers will have mortgage operators by 2030, adjust your estimate to 60%. The companies that survive won't just optimize for humans—they'll build digital experiences that work seamlessly with operators. This isn't speculation. It's already happening in travel, retail, and insurance. The question isn't whether AI operators will transform mortgage applications—it's whether your company will still be around when they do.