U.S. Cities With the Oldest Homes
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After more than a year and a half of a red-hot residential real estate market with high competition and record prices, recent months have shown some signs that the market is finally beginning to cool.
Part of the reason for this is seasonal, as the fall and winter months typically see a lower volume of home sales than the spring and summer. Other observers have suggested that a sharp increase in home values over the last 18 months has begun to price more would-be homebuyers out of the market. But one of the biggest factors is that after reaching record lows last year, the inventory of homes for sale began to turn upward this summer, finally bringing more supply into the market.
Much of this growth in inventory comes from an increase in the sale of existing homes as more owners recognize favorable market conditions and opt to sell. According to the National Association of Realtors, sales of existing homes were up 7% month-over-month in September. In contrast, new construction has been more challenging: new housing starts have rebounded to pre-pandemic levels, but completions have trended downward among ongoing labor shortages and supply chain challenges.
All else being equal, a majority of homebuyers express a preference for new houses. According to a survey from the National Association of Home Builders, 60% of buyers would prefer a new home over an existing one. But given the constraints on the supply of new housing, many more homebuyers are looking to the stock of existing homes as a desirable option.
Homebuyers’ preferences for newer homes is apparent in data on homes’ year of construction. Approximately 35% of homeowners live in a unit constructed since 1990, compared to just 29% of renters. Because homeowners have a greater financial stake in the places they live, they may be more motivated than renters to seek out new residences, which offer lower ongoing maintenance costs, newer (and frequently safer) building materials, and less worry about major expenses like new appliances, HVAC, or roofing.
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