North Dakota - North Dakota's housing market has been experiencing an inventory shortage for several years. Historically, lack of inventory has driven up prices. While the recent pandemic has helped the situation, inventory levels remain low and must improve. A permanent solution is needed to increase the number of available listings.
North Dakota's housing market was hit hard by the Coronavirus pandemic
The Coronavirus pandemic has hampered North Dakota's housing market in various ways. First, it shook the seller's confidence. As a result, fewer people applied for mortgages. Second, fewer listings meant fewer people looking for homes. The lack of available homes has led to lower applications, reducing competition and allowing sellers to raise prices. Lastly, the high cost of homes is making it harder for buyers to get a mortgage.
The worst hit states were urban areas. Although the housing market in these areas was relatively high, they had higher unemployment rates than those in the rest of the state. As a result, they had a hard time recovering. Meanwhile, rural areas were better off. The Flathead Valley experienced a 7.8% decrease in retail sales and a 14.2% decline in the food and hotel industries. Nevertheless, the housing market continued to grow, and the state's population grew by over 20,000 people.
Although the Coronavirus pandemic has caused a lot of hardship for residents of North Dakota, the state is slowly recovering. As of mid-2018, the median home value in the state was $278,322 - a nearly $161,000 increase. The state's unemployment rate is higher than the national average, so it is expected to take longer to recover fully.
Home sales are expanding
North Dakota real estate has been experiencing an inventory shortage for five years now. This lack of available homes prevents many homeowners from selling their properties, but it also creates demand for homes. In addition, the state is facing higher interest rates, which have deterred many people from buying. With less inventory, landlords are forced to raise their rental prices. However, this means more cash flow for landlords.
With the onset of the new year, the real estate market in the state is beginning to regain momentum. Despite the recent foreclosure spike across the country, North Dakota has been less affected than other housing markets. In August alone, only four counties in the state experienced foreclosures. While a recent foreclosure spike has hit North Dakota, its job market is still surprisingly resilient. Low-interest rates have also helped stimulate local activity, which has already started picking up.
In the coming months, home values across the U.S. are predicted to increase slightly. Zillow's own research has found that home values will increase in nearly half of the country's largest markets between Aug. 2022 and 2023. However, this doesn't mean that prices will remain at current levels. The report also shows that housing values will likely drop in two-thirds of the country by 2023.
Millennials are fueling home price growth
Millennials are a generation that was born between 1981 and 1996 and is slow to embrace homeownership. Despite their low home-buying rates, they fuel home price growth in many places. Millennials are likely to continue driving home sales for years to come.
Millennials are causing a dramatic change in the housing market. They are the largest and most educated generation in history and will dominate the housing market for years to come. They're the largest group of people under thirty and starting families. At the same time, housing inventory is at an unhealthy low, and the supply of homes will be difficult to meet the demand. Moreover, millennials are more likely to hire a real estate agent than any other generation.
Millennials are fueling home price growth across the country. Millennials are getting married and having children, which is driving up rent and home prices. As a result, a large portion of their income will go toward paying rent or mortgage payments. Millennials are also driving rent prices higher because rising mortgage rates force them to stay in rented homes. The soaring cost of living has also driven the rise in rent. One-third of American renters are burdened with the cost of rent; as a result, one-third of their income will go towards paying rent.
Inventory shortage will force more people to rent
Rising energy costs and higher prices of fertilizer and diesel are driving up the price of commodities and increasing the cost of transportation. This is pushing the cost of living, and many small businesses have passed this cost increase to their customers. However, they must make up for the increase in other areas, or they might close. Despite this, North Dakota still has a low cost of living.