A recently published Harvard study sees the strength and trajectory of the present economy will continue to result in new household formation, creating greater demand for housing through 2019 and even into 2020. The household formation trend continues to provide a stabilizing force with 1.2 million new households per year being formed over the last 3 years. 
As homeownership continues to increase the ongoing housing inventory shortage will have its impact by making home purchasing more expensive.
Other factors making housing more expensive (as covered in other Counsellors Title blog posts) are the rising costs of materials and skilled labor compounded by the scarcity of buildable lots.
According to the Harvard study, the cost of residential land has increased by 80% in the US over the last 10 years, causing single family homes to climb in price from $159,800 in 2012 to $203,200 in 2017.
Some of the states which have seen historic surges in land appreciation are:
Nevada +158%
Colorado +96%
California +88%
Arizona + 81%.
Land costs have filtered down to a higher overall cost in homeownership with housing prices rising 41% between 2011 and 2018. This may sound like a lot, but it’s still 2% less than the average home price at the peak of 2006.
Although homeownership prices continue to climb, the total number of renter households is dropping. But, according to the Harvard report, approximately half of all renters today spend more than 30% of their income on rent. In 2018, 29% of newly-completed multi-family housing units rented apartments for more than $2,050, especially in the Northeast.
This adds economic pressure upon those who continue to rent as the average rent nationwide rose 3.6% over the last year. In areas where demand is high, vacancy rates continue to allow landlords to raise rent beyond the national rate increase.
A trend was also reported in the Harvard study indicating that high-income rentals are on the rise, which has been a trend for the last eight years.
The report indicates that between 2017 and 2018, 310,000 new high-income renters entered the market. Conversely, low-cost rentals are on the decrease, with 17% fewer low-income rentals than in 2011.
https://www.curbed.com/2019/6/25/18715797/housing-market-affordable-housing-state-of-nations-housing-harvard-2019
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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