Homebuilders offer options that buyers cannot find in the existing home sales market.
The share of newly built homes in the market is small, usually around 10%. Builders have increased that percentage in the past year, and they will continue to do so until 2024. New home sales continue to rise despite higher mortgage rates because builders have more inventory on the market now than before the COVID-19 epidemic. A lack of inventory slows the demand for existing houses. It is only half what it was last year. Existing home sales are expected to recover in 2019 after two years of declines of nearly 20%. The baseline is a 10% to 15% increase. A surprising gain of 25 to 30 percent is possible if more inventory appears. Multiple-offer situations on mid- to moderate-priced houses are due to a lack of inventory. This is a testament to the importance that the list plays in moving the market.
Building homes can increase inventory. To grow the list of existing homes, owners must give up their low mortgage rates from a few years ago. Some owners may not be willing to give up rates in the range of 2.5% to 3.0%. Consider the events of the last two years. Three million marriages were celebrated, 1.5 million divorces were filed, 7 million births occurred, 4,000,000 deaths took place, and 7,000,000 Americans reached 65. Many growing families and divorcing spouses can’t afford to stay put. It’s impossible to put off forever the dream of retiring in a home that requires less maintenance. People want and need to move. A small drop in mortgage rates may be enough to entice people.
Over the last two years, we have seen 4 million new net jobs and 50 million job changes. Many office workers want a place that can accommodate new hybrid work policies.
The stockpile of unsold goods has been increasing steadily. The home sale market will be more dynamic when you combine this with the normal demand response of lower rates.
Virtual purchases persist
NAR data shows that despite a slight drop in sales, buyer motivation is still strong. In August, the marketplace and technology prompted 7% of buyers to buy a home solely based on a virtual walkthrough, open house, or showing, which is virtually unchanged compared to one year earlier.
Electric vehicles can play a crucial role in the fight against emissions. Their net contribution, which is already visible today, to reducing carbon emissions will increase in parallel with the rate at which electricity production decarbonizes. Policymakers must consider global clean energy transitions holistically across all sectors. This will ensure that the progress made in one industry does not be undermined by a lack of progress in another.
The IEA has released a report that shows a major increase in the adoption of electric vehicles this decade. This could be further accelerated if governments adopt policies aimed at achieving net zero goals.
Launch webinar
Global EV Outlook for 2021
The Global EV Outlook, an annual publication, identifies and discusses the latest developments in electric mobility around the world. The Electric Vehicles Initiative members helped develop it. The report examines key topics such as the deployment of electric vehicles (EVs) and charging infrastructure, energy consumption, CO2 emission, and battery demand. It combines historical analysis and projections up to 2030. This report contains policy recommendations that take into account the learnings from leading markets in order to inform stakeholders and policymakers who are considering policy frameworks for electric vehicle adoption.
