An affordability challenge in rural America, Canadian and American renters consider the pursuit of homeownership, and Arkansas realtors helping communities facing food insecurity. From the wild and wooly world of real estate, here are our Hits and Misses for the week of Nov. 17-21.
Miss: A Rural Crisis. While most housing data reports focus on urban and suburban markets, a new study released this week by Redfin found homebuyers need to earn an annual income of $74,508 to afford a median-priced home in rural counties. That’s up 105.8% from before the pandemic, when rural buyers needed to earn $36,206. Exacerbating that situation is the $280,900 median sale price in rural counties, up 60.5% from $175,000 before the pandemic. In comparison, the median household income in rural counties is only $69,307, up by just 33.3% from $52,002 before the pandemic. With all the new talk about “affordability” coming out of Washington, clearly much of that focus needs to be aimed at our rural neighbors who have been suffering outside of the spotlight.
Miss: The Wrong Messenger. Earlier this week, billionaire investor Bill Ackman conducted an online video presentation criticizing the Trump administration’s plan to conduct an initial public offering of Fannie Mae and Freddie Mac. Ackman offered his own plan on how to deal with the government-sponsored enterprises, which was more than a little self-serving considering that his Pershing Square hedge fund owns a considerable chunk of Fannie Mae and Freddie Mac’s common stock. “We do not believe that a sale of a piece of Fannie and Freddie to the public is either feasible or really desirable at this moment in time,” Ackman said. If anything, that should be an invitation for the administration to begin offering details on just what it plans to do with Fannie and Freddie. To date, we’ve been given no serious information on what to expect, and that is completely unacceptable.
Miss: The Wrong Message. While the administration has been mostly mum about Fannie and Freddie, the president is still complaining about Federal Reserve Chairman Jerome Powell. The Hill reports Trump raised the subject again by claiming he would replace Powell “right now,” but “people are holding me back.” He then added, “He’s a fool. He’s a stupid man.” As we used to say back in the days of the phonograph when we got tired of hearing the same old song played endlessly: change the record!
Miss: Still Out of Reach. One of the most depressing stories this week involved a study released by SingleKey that found fewer Canadians are viewing rental housing as their stepping stone to future homeownership. The new report found the median age of a Canadian renter is 32, and 11.7% of renters have children. Average of renters spend over one-third (38.6%) of their income on rent and debt repayments, which puts most renters well above the 30% affordability threshold. Viler Lika, founder and CEO of SingleKey, observed, “The idea that renters are young, mobile, and just passing through no longer holds true. Renting is now a long-term reality for many Canadians in their 30s and 40s — often with kids, careers, and no clear path to homeownership.”
Hit: An Optimistic Outlook. While the picture looks gloomy in Canada, the American outlook on renters becoming homeowners is cheerier. A new Experian survey found nearly half (47%) of renters anticipate being ready to purchase a home within the next four years, with 67% looking to make such a purchase in eight years. Among age demographics, 48% of Gen Z non-homeowners and 50% of millennial non-homeowners predict they will be able to buy a home by 2029. Experian’s report also showed roughly 60% of today’s renters have near-prime or better scores. Let’s hope these prospective buyers have a healthy housing market when they are ready to start shopping.
Hit: Helping Friends and Neighbors. A big thumbs up goes to the North Central Board of Realtors in Arkansas, which delivered nearly 40,000 pounds of food to local pantries as part of its annual Feed Our Children event. More than 60 realtors and affiliate members collected food for 18 hunger relief organizations across Baxter and Marion counties and Calico Rock. The deliveries came when food pantries were struggling to assist a record number of residents affected by the recent 43-day federal shutdown. This organization represents the best of the real estate industry, and it is a pleasure to share the good news they created.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
