We’ve wrapped up January already, and Orion’s brokers continue to help borrowers in many areas either buy a home or refinance their existing mortgage, thus saving them money. We believe that those borrowers are fortunate to own homes, as study after study shows that the pandemic is fueling the sudden demand for housing, especially in the suburbs.
COVID-19 disrupted what had been a period of sustained growth within city centers, and though new listings fell by a roughly similar magnitude in the urban centers and the suburbs during the early months of the pandemic, the stagnant inventory since then has occurred disproportionately around big cities rather than in suburbs and smaller metro areas. Orion’s brokers are telling our AEs similar things.
Even as the national housing market has rebounded since last summer, sales near major metro centers have continued to underperform versus the suburbs. In fact, toward the end of the summer, in August, new listings in urban centers were 16 percent higher than in August 2019, while those in the suburbs were flat to down.
Even now, at the start of 2021, a steady level of inventory near city centers signals the ongoing demand shift from large urban centers toward the suburbs has continued even with mass vaccination and a resumption of normal life hopefully on the imminent horizon. With remote working rates expected to remain well above pre-pandemic levels, Orion expects that the demand for housing near these urban centers may have permanently declined. Many builders have noted that buyers are looking for dedicated office and virtual school spaces in particular, increasing demand for homes with more square footage in cheaper locations. Our brokers echo that sentiment.
Fortunately for your buyers, and those Orion is helping refinance, the entire housing market remains relatively strong. Homeownership rates over the middle half of 2020 saw the same gains as in the four years from 1997 to 2000. During this period, however, we have the combination of low rates, a newfound appreciation for a home, and over 70 million people in their late 20s and early 30s wanting to own their own place.
It is a great time to be a residential loan broker!