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December 2016

New census data bodes well for housing

Rising incomes should spur demand for housing, particularly among young adults, according to some analysts of recent Census data.

The Current Population Survey's 2016 Annual Social and Economic Supplement, which includes household income data for 2015, showed that real median household income rose 5.2 percent from 2014 to 2015. That marks the first annual increase in such income in nearly a decade.

The report also showed median household incomes rose in each region of the country, and across all age groups, as well as for non-Hispanic white, black, and Hispanic households.

Tabulations by the Joint Center for Housing Studies of Harvard University show personal earnings were up most sharply for the prime household formation and first-time homebuyer age groups.

"For several reasons, this growth is likely to have significant implications for housing markets," remarked Dan McCue, senior research associate at JCHS. With regard to affordability, McCue noted as higher income households are more likely to own homes, "increases in incomes among households will work against the continued decline in the US homeownership rate," but he also acknowledged "on the affordability front there is still a long way to go."