North Carolina Homeownership Trend in Household Formation and Homeownership, by Janet Petrozelle.

North Carolina

Homeownership Trend in Household Formation and Homeownership

By Janet Petrozelle

In January 2021 homeownership rate in North Carolina was 65.80%, .as of data from the United State Federal Reserve.

Two years prior (January 2019), the Homeownership rate was 65.10 percent- a 6.6 percentage point drop from the historical high of 71.70 percent recorded in January 1999.

North Carolina has seen modest growth in the past decade of 11.2 percent in terms of population growth. Last year alone, the state was ranked among the top 5 most preferred places due to its strong economy, good political ambiance, and other ecological factors. This effectively meant that the increase in Population would be felt in other areas, such as homeownership, and consequently, the state has seen increases in the housing demand, and most people bought homes to live there.

The average cost of living index places North Carolina 5 basis points below the national average of 100. According to Investopedia.com, the cost of living indexes compares the expenses an average person can expect to acquire food, shelter, transportation, energy, clothing, education, healthcare, and entertainment in the different regions, according to Investopedia.com. This puts the residents of North Carolina at an advantage. With a quite low cost of living in Carolina, most people prefer to invest and or buy in homes as they are extremely affordable. You will find out that home prices in North Carolina are reasonably priced, which makes them affordable to a majority of people in and out of the state. This has further exacerbated the demand for houses in the state.

Most homebuyers prefer North Carolina because of:

• Easy access to health care. • Abundant outdoor activities • Low cost of living and economic opportunities • Great sense of community • Temperate weather and mild winter

A recent report from ATTOM shows that overall, North Carolina ranked the second to have seen modest growth rates in home equity and appreciation rates. To highlight this fact, by the end of last year (Q4, 2021), most homes in the state were considered to be 38.6% equity rich, while this year, it is reported that the home equity has grown to 44.2% across the state. For investors looking to invest in this rich state, you may be wondering, how consistent is this

growth? Research shows that equity gains have been consistent and not just in North Carolina but everywhere. Still, most markets experienced accelerated growth due to the pandemic, where home prices grew in double or triple digits, and in some cases, they quadrupled. If you take the state, for instance, at the end of 2020, the home equity was at 24%.

The North Carolina housing market is doing well and has kept pace with the national housing market. While, like most markets, it was affected by the Coronavirus pandemic, the unique combination of supply and demand imbalance, improved economic conditions, improved financial wellness for the buyers, and low unemployment rates have all fostered an environment in which local homes have appreciated exponentially.

Looking at homeownership alone, the rate in North Carolina was 65.2% in 2018, 65.1% in 2019, and 68.7% in 2020, and in 2021 it was 65.8%. From the latest statistic, homeownership in North Carolina is as follow;

• An occupied housing unit is 4,046, 348 while occupied rental houses unit are 1,403,639 • The homeownership rate is 64.6% • Homeownership vacancy is 0,5 % • The rental vacancy is 4.9%

Although the homeownership rate seems to have moved down from last year’s figure, the demand is still high as we can see there is only a low percentage of homeownership that are vacant and rental vacancy is still low. June is homeownership month, and we are just about to enter the spring season where which is traditionally known for heightened real estate activities. We expect the homeownership demand to continue rising, which will also lead to an increase in the home prices.