As of June 2019, the United States logged the longest economic expansion period in its history with 121 months of positive growth. This unprecedented economic development has translated to the housing market, boosting all aspects of the industry including home equity rates, home prices and rents, and successful house flipping. Frank Nothaft, chief economist at CoreLogic, explains, “During the last nine years, the expansion has created more than 20 million jobs, raised family incomes and rebuilt consumer confidence. The longest stretch of mortgage rates below 5 percent in more than 60 years has supplemented these factors. These economic forces have driven a recovery in home sales, construction, prices and home equity wealth.”
Home equity rates are one of the best indicators of economic well-being. In 2010, 25.9 percent of American homes were underwater with negative home equity. In the first quarter of 2019 that percent plummeted to just 4.1 percent, meaning homeowners are in a much more profitable position than a decade ago. In 2009 nationwide home equity came in at $6.1 trillion but that number has increased to $15.8 trillion in 2019, with an average individual homeowner equity increase of almost $100,000. Additionally, mortgage delinquency rates fell to a record low of 3.6 percent in April 2019. Not only are homeowners enjoying higher equity, they are also in a strong position to weather any future downturns in the national economy.
Housing prices and rents have experienced continued growth since the height of the recession, with home prices increasing 50 percent and rents 33 percent since 2009. The overall economic expansion has kept up with rising housing costs are more jobs are created and household income increases. Millennials are boosting the housing market as they increasingly look to buying rather than renting which translates to a stable market. CoreLogic’s deputy chief economist Ralph McLaughlin notes, “With prices neither rising too fast nor too slow, and with a growing stream of young households looking to buy homes over the next two decades, the long-term view looks healthy.”
House flipping has also recovered and remains stable, although it looks vastly different than the months leading up to the recession. Professional investors have replaced novice flippers and are focused on making more sustainable decisions, stabilizing the house flipping industry. The rate of house flips peaked at 11.3 in 2006 before falling to just 4.9 percent post-recession. That same rate bounced back to 11.4 percent in 2018 and remains stable, indicating consumer and investor confidence in the value of house flipping.