While the housing market has cooled in recent months, the last few years have seen a home-buying frenzy. Historically low interest rates, government stimulus payments, and high savings rates helped to ignite a housing boom, the likes of which have not been seen since 2006. At the same time, the COVID-19 pandemic caused a shift in home-buyer preferences, away from dense city living towards single-family homes with more living space, both indoors and out.
As the demand for single-family homes grew during the pandemic, the supply shrunk. In fact, the supply of single-family homes has been trending downwards for years due to a shortage of new home builds. Just over 10 years ago, in February 2012, there was a 6.8 months supply of single-family homes—in other words, it would have taken nearly seven months for the inventory of homes on the market to sell given demand at that time. Six months of supply is considered a balanced market between buyers and sellers, and tends to be associated with moderate price appreciation. Anything less than six months is viewed as a seller’s market, and home prices will increase more quickly.
Single-family home inventory dropped further during the pandemic, reaching a low of just a single month of supply in December 2021. However, single-family home inventory has climbed since March of this year as mortgage rates have risen.
Making matters worse for would-be home buyers seeking single-family homes, single-family home sales represent a smaller share of total sales than they did before the pandemic. In 2019, single-family home sales accounted for less than 76% of total sales, down from 78% in 2019. At the same time, the share of condos, townhomes, and multi-family homes have all increased. Supply-chain disruptions due to the pandemic slowed down home building, contributing to the limited supply of single-family homes.
Some parts of the country have a greater supply of single-family homes than others. At a regional level, the South has had the largest share of recent single-family home purchases (in 2021). The South has more rural and suburban areas, where single-family homes are the most common. In Oklahoma and Mississippi, 96.1% and 95% of recent home purchases were single-family, respectively, the highest shares in the U.S. The home-buying landscape looks much different in Maryland and Hawaii, however, where just 56.8% and 46.7% of recent home purchases are single-family, respectively.
To find the states where people are buying the most single-family homes, researchers at Inspection Support Network analyzed the latest data from the U.S. Census Bureau and Redfin. The researchers ranked states according to the share of home purchases that were single-family in 2021. Researchers also calculated the median sale price for single-family homes, the share of all owner-occupied homes that are single-family, and the total number of owner-occupied single-family homes.
The analysis found that 85.3% of all home purchases in Michigan last year were single-family, compared to 75.9% nationally. Here is a summary of the data for Michigan:
Share of recent purchases that are single-family: 85.3%
Median sale price for single-family homes: $227,175
Share of all owner-occupied homes that are single-family: 88.3%
Total owner-occupied single-family homes: 2,619,870
For reference, here are the statistics for the entire United States:
Share of recent purchases that are single-family: 75.9%
Median sale price for single-family homes: $388,172
Share of all owner-occupied homes that are single-family: 82.5%
Total owner-occupied single-family homes: 68,840,121
For more information, a detailed methodology, and complete results, you can find the original report on Inspection Support Network’s website: https://www.inspectionsupport.com/resources/cities-where-people-are-buying-the-most-single-family-homes/