Residential Real Estate - United States

The Residential Real Estate market market in the United States is expected to reach a value of US$106.70tn by the year 2024.
This projection indicates a steady annual growth rate (CAGR 2024-2029) of 3.61%, which will result in a market volume of US$127.40tn by the year 2029.
When compared globally, it is worth noting that China is anticipated to generate the highest value in the Real Estate sector, with a projected value of US$112.9tn in 2024.
The United States residential real estate market is experiencing a surge in demand due to low interest rates and a strong economy.

Definition:

The residential real estate market covers the leases and transactions of residential properties. Residential real estate leases refer to the market where landlords and tenants enter into agreements for the rental of residential properties, such as apartments, houses, and condominiums, while residential real can be defined as buying, selling, or transfer of ownership of residential properties.

Structure:

The residential real estate market covers real estate transactions and leases, and the section, residential real estate leases, is divided into apartment and house leases.

Additional information:

The market contains the following KPIs: real estate value aggregated for all countries and regions, average real estate value, real estate transaction revenue, number of real estate sold, number of leased and owned real estate, average room per resident, and dwelling type shares. The dwelling type shares comprise the share of the population that lives in houses and apartments. These shares are displayed for real estate owners and for real estate renters as well.

Residential real estate transactions
Residential real estate leases

Real estate agencies
Construction companies
Accommodation services, such as Airbnb
Commercial real estate leases and transactions
Publicly owned buildings used by the local government
Buildings used for public health care services

The Residential Real Estate market in United States is experiencing significant developments and trends.

Customer preferences: Customers in the United States are increasingly looking for sustainable and energy-efficient homes. They are willing to pay a premium for properties that have green features such as solar panels, energy-efficient appliances, and smart home technology. Additionally, there is a growing demand for homes with flexible spaces that can be used for remote work or as multi-purpose areas.

Trends in the market: One major trend in the United States residential real estate market is the rise of suburban living. Many people are moving away from densely populated urban areas and are seeking larger homes with more outdoor space in suburban communities. This shift is driven by factors such as the desire for more space, lower housing costs, and the ability to work remotely. As a result, suburban real estate markets are experiencing increased demand and rising prices. Another trend is the increased popularity of second homes and vacation properties. With the rise of remote work and the ability to work from anywhere, more individuals are purchasing second homes in desirable vacation destinations. This trend is driven by the desire for a change of scenery, the ability to generate rental income, and the potential for long-term investment appreciation.

Local special circumstances: Certain cities in the United States, such as San Francisco and New York City, have unique local circumstances that impact the residential real estate market. These cities have limited land availability and high population densities, leading to high demand and limited supply of housing. As a result, prices in these cities tend to be significantly higher compared to other regions in the country. Additionally, these cities have a strong rental market, with a large percentage of the population renting rather than owning homes.

Underlying macroeconomic factors: Several macroeconomic factors are influencing the development of the residential real estate market in the United States. Low mortgage interest rates have made homeownership more affordable and have encouraged individuals to enter the housing market. Additionally, the strong performance of the stock market and overall economic growth have increased consumer confidence and spending power, leading to increased demand for homes. Overall, the residential real estate market in the United States is being shaped by customer preferences for sustainable and flexible homes, the trend towards suburban living, the popularity of second homes, and local special circumstances in certain cities. These trends are being supported by underlying macroeconomic factors such as low interest rates and a strong economy.

Data coverage:

Figures are based on total and average value of residential real estate, residential estate transactions and leases.

Modeling approach:

Market size is determined by a combined top-down and bottom-up approach. We use national statistics, international organizations, and industry associations to analyze the markets. To estimate the market size for each country individually, we use relevant key market indicators and data from country specific industry associations such as GDP, price level index, household wealth, household size, number of renter and owner households, housing consumer spending per capita.

Forecasts:

We use a variety of forecasting techniques, depending on the behavior of the market, for instance, exponential trend smoothing. The main drivers are GDP per capita, population, number of renter and owner households, price level index, housing consumer spending per capita.

Additional Notes:

Data is modeled using current exchange rates. The market is updated twice per year in case market dynamics change. The impacts of the Russia-Ukraine war are considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

The global housing market has slowed amid high inflation and soaring borrowing costs. Homeownership is one of the most universal signs of success and prosperity: It serves both as a source of stable and secure housing and a long-term investment. After the global financial crisis, property prices rose in many countries and especially in advanced economies. For more than a decade after that, the housing market has been on an upward trajectory, culminating in the housing boom during the COVID-19 pandemic. However, housing shortages in highly competitive markets, the recent rapid house price growth, soaring inflation, and consequently, some of the highest mortgage interest rates recorded in the past 10 years have led to the market cooling.

Soaring inflation and aggressive mortgage interest rate hikes cooled the European housing market after a nearly decade-long period of growth. Since 2015, house prices in the European Union have grown by about 50 percent. When inflation in Europe started to rise at an alarming rate in 2021, the European Central Bank increased interest rates, resulting in substantially higher mortgage interest rates and a decline in homebuying. But how important is homeownership for Europeans?

Generally considered the third key pillar of the food, clothing, and shelter trinity popularized in India over generations, owning a home is still prioritized as a measure of financial security by a vast majority of the Indian population. The COVID-19 pandemic with its successive lockdowns and restrictions to stay within the confines of one’s home, further reinforced this vision. India’s growing urban population, rising household incomes, and decade-long low-interest rates have been propelling the demand for residential units, driving up the sales volume. Even though the residential real estate sector was severely hit in 2020, it marked a strong recovery in consecutive years, crossing pre-COVID sales figures.

Residential Real Estate - United States

Value

Volume

Analyst Opinion

Transaction Value

Revenue

Household Type

Real Estate Type

Community Size Split

Living Space

Methodology

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