We all experience the confusion of ever-shifting headlines today. One day things are on an upward trend; the next they are going in the opposite direction. Now more than ever we need to pay less attention to headlines and more attention to the facts from reliable sources.
Population growth is not slowing down – the U.S. Census Bureau estimated earlier this year that 318.7 million people live in this country, up from a little over 315 million at the end of 2012. Unlike much of Europe, our population is positioned for higher birth rates. This means the demand for new housing is not going to slow down.
The largest group of people in the U.S. today is 22 year-olds. Within the next seven to 10 years, this generation of people will seek housing for the next stage of their lives. Because these folks need places to live, I am focused on the supply side of the housing equation where home builders report that the lot shortage is an ongoing challenge.
One indicator of current market capacity being underserved: the housing affordability index published by the National Association of Realtors reports that with the median price of a home just shy of $200,000 and interest rates at 4%, a family earning the median income has 175.8% of the income required to qualify for a mortgage with 20% down. This snapshot of the nation in general creates a compelling story.
A careful consideration of these facts tells me that we are running a marathon and not a sprint. Whether the news is slowing sales this month, price increases or adjustments, I can tell you I do not react to headlines; instead I am immersed in research. I don’t live by sound bites; instead I understand the demographics.
The need for housing will continue to grow, and developers and builders, investment and management firms such as ours will continue to answer that need, whether through infill in urban centers, or new development in outlying markets.
I’m confident of the future and invigorated by the ability to contribute to this recovery and to the economic future of our country. It’s my quest to meet this challenge and I’m excited by this chance to serve our families like never before. The opportunity to rebuild the American Dream is still alive and well, friends.