The Residential Real Estate Market in the United States is estimated at USD 2.53 trillion in 2023, and is expected to reach USD 2.80 trillion by 2028, growing at a CAGR of 2.04% during the forecast period (2023-2028).
As reported in March 2021, existing home sales, including single-family homes, townhomes, condominiums, and cooperatives, account for more than 85% of the market. Meanwhile, new home sales represent the remaining 15% of the market.
The sales of existing homes are measured nationwide, giving breakdowns for the west, midwest, south, and northeast regions of the country. The southern region of the United States leads in sales by more than 45%, followed by the midwest, west, and northeast.
According to the National Association of Realtors, sales are varied by price range. In 2021, most of the sales saw significant growth in the USD 250,000 to USD 500,000 price range by more than 42%, followed by the USD 100,000 to USD 250,000 price range.
Furthermore, sales of existing homes are leveraged by increasing first-time buyers, investors' interest, more cash sales, etc. In addition, in 2022, more than 6.5 million sales have been registered, with month-on-month growth of 6.7% and Y-o-Y growth of more than 2.3%. At the same time, the median sales price accounts for USD 350,300 with a growth rate of 15.4% compared to 2021.
Residential real estate was adversely affected by the pandemic. Despite this disruption, the housing market is resilient with increasing homeownership in this sector.
Furthermore, in the fourth quarter of 2021, more than 142,406 housing units were available to meet consumer demand, in which more than 89% of housing units were occupied by owners and renters. In addition, most of the sales in the sector are contributed by middle-aged and aged citizens in the country. For instance, people aged from 45 to 65 years accounted for more than 70% of homeownership rates in the country in the four quarters of 2021.
Furthermore, in Q4 2021, the housing market experienced the highest ownership growth rate in the midwest region, with 70.1%, followed by the south (67%), northeast (62%), and west (60%). In addition, the growth rate of homeownership in 2021 remained resilient, despite the slight decline from the previous year due to changes in consumer behavior during the pandemic.
Most of the demand in this sector is obtained from condominiums and apartments. Apartments are expected to dominate the sector compared to condominiums because 64,000 apartment units were completed in Q2 2021.
The residential real estate market in the United States is fragmented, with the top 50 companies accounting for nearly 30-40% of the market share. Large companies have advantages in terms of financial resources, while small companies can compete effectively by developing expertise in local markets. Some of the major companies include Equity Residential, Brookfield, Essex Property Trust, and Simon Property Group.
The country's inflationary trend has had a significant impact on business. High inflation has pushed individuals to spend more on basic necessities such as food and clothing while at the same time hitting the homeownership sector hard.
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