As of this month, the United States has experienced 121 consecutive months of economic expansion since the Great Recession of June 2009, the longest period of economic growth on record. Housing has accounted for 15% of the country’s economic output since 2010, and GDP has maintained annual growth ranging from 1.6% to 2.9%. A special report by CoreLogic examined how the housing market contributed to US economic growth during this stellar growth streak.
House prices and rents have continued to rise since the end of the recession, and through May 2019 house prices have risen 50% cumulatively, while single-family home rents have risen 33% . The housing economy welcomed 1.1 million new homeowners and the number of renters increased by 458,000. Millennials reversed the trend of new buyers renting longer, accounting for 44% of mortgage applications for l buying a house in 2018.
The housing turnover rate has also seen significant increases since the recession. The rate of properties bought and resold within two years reached 11.4% in the first quarter of 2018, up from its low point of 4.9% in the third quarter of 2010.
Rising employment rates and the nation’s improving economy contributed to a record $15.8 trillion in home equity in the first quarter of 2019, up from $6.1 trillion in the first quarter. of 2009. Unemployment fell to a record low of 3.6% in May 2019. after peaking at 10% in October 2019, and June of this year marked the 16th consecutive month that the unemployment rate was at or below at 4%.
Between the first quarter of 2010 and the first quarter of 2019, the average net worth per borrower increased from approximately $75,000 to $171,000. With mortgage delinquencies and foreclosures also at or near record highs, this data shows that homeowners are benefiting from economic growth in several ways: rising home values, a stronger job market and modest price increases. .
Amid the country’s strong GDP and measures put in place to prevent another recession, some economists are predicting that another recession is imminent. Signs as to why the bond market is pricing in a slowdown after a drop in 10-year Treasury yields, two stock market corrections in the past 15 months and a slowdown in house price growth since it passed from 4.1% in January to 3.6 percent in May this year. Still, the U.S. economy appears healthy, and CoreLogic predicts a 5.6% acceleration in annual home price growth from June 2019 to June 2020.