Home sales have skyrocketed during the pandemic. Most of this is due to relocation triggered by the spread of COVID-19 across big, expensive cities. People have moved to places that allow them to work remotely with a better quality of life. Sales have also been boosted by low mortgage rates. Among the effects of this migration, homeownership rates have risen in some cities and fallen off in others.
The home sales rush has been a double-edged sword. Rising prices have made some homes unaffordable compared to a year ago. And, inventories have crashed as available homes have been snapped up quickly. These issues have put living in some cities out of reach for buyers who might have relocated to them not long ago. The new building of homes has been slowed by a sharp rise in essential building materials like lumber.
Realtor.com studied the rise and fall homeownership in the 75 largest metros using Census Bureau data. Their researchers looked at homeownership rates in the fourth quarter of 2020 and the first quarter of 2021 and compared them with the same quarter the year before. Realtor.com Chief Economist Danielle Hale commented:
“Some markets like Albany, Sacramento, and Buffalo clearly benefited from an influx of people leaving big cities like New York and San Francisco, but many other markets are just good places to live that benefited from increased homebuyer motivation thanks to low mortgage interest rates and a lot of time spent at home over the last year.”
On the other hand, in some cities outside investors bought homes and turned them into rentals, and home prices in other markers soared beyond affordability. Homeownership in some of these cities fell.
The city where homeownership fell the most over the measured period was Syracuse, where the drop was 8.6%. Reator.com experts explained:
Like just about everywhere else in the country, Syracuse has more potential buyers than it does homes for sale. That’s one main reason homeownership is falling. The market is so hectic that buyers offering 20% over asking price to outbid one another are commonplace.
Syracuse, however, does remain affordable. The median price of a home is $220,000, at least $100,000 below the national figure.