connecticut housing market€¦ · connecticut housing market . august 2019 planning, ... (jchs)...
TRANSCRIPT
2019
Andrew Bolger, Research Analyst
Planning, Research & Evaluation Department
August 2019
Connecticut Housing Market Snapshot
August 2019 Planning, Research, & Evaluation Page 2 of 19
Table of Contents
Summary of Housing Trends ………………………………..……………………………………………………………………3
Housing Type and Tenure …………………..………………………………………………………………………………….….4
Vacancy…………………………………………………………………………………………………………….……………………….8
Aging Housing Stock ……………………………………………………………………………………………………………..….9
Single Family Home Sale Volume……………..………………………………………………………………………………10
Single Family Home Sale Price………………………………………………………..………………………………………..11
House Price Index – CT vs New England & US ………………..…………………………………………….12
Foreclosures ………………………………………………………………………………………………………………………….…13
Housing Construction………………………………………………………………………………………………………….……14
Household Growth………………………………………………………………………………………………………..15
Affordability …………………………………………………………………………………………………………………………….16
Mortgage Originations..………………..…………………………………………………………………………………………18
Generational Trends…………………………………………………………………………………………………………………19
August 2019 Planning, Research, & Evaluation Page 3 of 19
Summary of Connecticut’s Housing Trends
In June of 2019, Harvard’ Joint Center for Housing Studies (JCHS) released its annual State of the
Nation’s Housing Report detailing the shortage of affordable housing options across the county. The
report details trends in affordability, tenure, housing supply and construction, sales, home values,
population and household formation, and other challengers in the housing market. Specifically the
report found that construction rates are lagging relative to household growth, homeownership rates
and affordability are on the rise, and rental rates and cost burdens increased.
Connecticut in many ways resembles national trends but does diverge in some notable areas.
Connecticut’s housing market in 2018 can generally be characterized by a continued recovery from the
Great Recession of 2008 to 2010. Home prices and sales volume have yet to return to their pre-2008
levels and while vacancy rates are low, new housing construction has not kept pace with other New
England states and the U.S. generally.
According to latest American Community Survey (ACS) estimates, the homeownership rate in
Connecticut is 66.59 percent. The owner and rental vacancy rates are 1.5 and 6.8 percent respectively.
The median age of the home in Connecticut was built in 1964 and 66.3 percent of the stock is made up
of one unit attached and detached units. Single family homes sales, according to the Warren Group,
have rebounded from their low point in 2011, as nearly 51,000 homes were sold in 2018. Home sale
prices remained steady in 2018, with the median home selling for $229,500. Foreclosures are also down
from their peak levels. In 2018, there were 3,926 foreclosure deeds in Connecticut. Affordability remains
a problem in the state as 29.45 percent of owners and 52.29 or rental households pay more than 30
percent of their income on housing costs. Finally, according to the most recent available Home
Mortgage Disclosure Act (HMDA) data, in 2017 Connecticut saw $10.63 billion in mortgage originations
for home purchase, up from $9.7 billion in the prior year.
August 2019 Planning, Research, & Evaluation Page 4 of 19
Housing Unit Type and Tenure
Like much of the U.S. and New England, single family homes make up the majority of the housing stock
in Connecticut. According to the 2013-2017 American Community Survey (ACS) estimates, one unit
attached and detached units make up 66.3 percent of the total housing stock compared to 69.8 percent
nationwide. Compared to other states in the New England Region, Connecticut had more than
Massachusetts and Rhode Island but slightly less than New Hampshire, Vermont, and Maine.
Two, three and four, and five to nine unit structures make up 7.7, 8.04, and 5.3 percent of the stock
respectively. Large multifamily structures with ten or more units make up 12 percent of Connecticut’s
total housing units while mobile homes are only 0.71 percent the housing units. Litchfield County ranked
number one in the percentage of single unit housing structures while New Haven County had the least
out the total housing stock.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
United States Massachusetts Rhode Island Connecticut NewHampshire
Vermont Maine
Source: American Community survey, 5 Year estimates, 2013-2017
Housing Unit Types (Connecticut, New England, and U.S.)
1 Unit 2 Units 3 or 4 Units 5 to 9 Units 10 or More Units Mobile Home
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
New HavenCounty
HartfordCounty
FairfieldCounty
New LondonCounty
WindhamCounty
TollandCounty
MiddlesexCounty
LitchfieldCounty
Source: American Community Survery, 5 Year estimates, 2013-2017
Housing Unit Type - Connecticut Counties
1 Unit 2 Units 3 or 4 Units 5 to 9 Units 10 or More Units Mobile Home
August 2019 Planning, Research, & Evaluation Page 5 of 19
Connecticut, like the country at large, is a majority owner state. Connecticut’s ownership rate, according
to the 2013-2017 ACS, is 66.59 percent which is higher than the national rate of 63.8 percent. In New
England, Rhode Island had the lowest ownership rate of 60.02 percent while Maine had the highest rate
at 72.04 percent.
In Connecticut, New Haven County has the lowest ownership rate at 62.3 percent while Litchfield
County has the highest rate at 76.8 percent. At the municipal level, the cities of Hartford, New Haven,
and New London have the lowest ownership rates at 24, 28, and 37 percent respectively. The towns of
Harwinton, Union, and Weston have the highest ownership rates at 96, 97, and 96 percent respectively.
63.82% 60.02% 62.36% 66.59% 70.52% 70.68% 72.04%
36.18% 39.98% 37.64% 33.41% 29.48% 29.32% 27.96%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
United States Rhode Island Massachusetts Connecticut Vermont New Hampshire Maine
Source: American Community Survey, 5 Year Estimates, 2013-2017
Housing Tenure (Connecticut, New England, and U.S.)
Owner occupied Renter occupied
62.3% 64.6% 66.7% 67.7% 69.9% 72.4% 73.7% 76.8%
37.7% 35.4% 33.3% 32.3% 30.1% 27.6% 26.3% 23.2%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
New Haven Hartford New London Fairfield Windham Tolland Middlesex Litchfield
Source: American Community Survey, 5 year estimates, 2013-2017
Housing Tenure By Connecticut County
Owner Occupied Renter Occupied
August 2019 Planning, Research, & Evaluation Page 6 of 19
After having declined for seven consecutive years from 2010 to 2016, the homeownership rate among
under 35 year olds in Connecticut increased slightly from 32.08 percent to 33.67 percent in 2017.
While there was not a decrease in the number of renter households, Connecticut’s overall rental rate
appeared to have stagnated or even declined in 2017 after having increased year over year during and
after the Great Recession. Connecticut’s rental rate stands at 33.41%.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Under 35 35 to 64 64 and older
Ho
meo
wn
ersh
ip R
ate
Source: American Community Survey - 5 Year Estimates
Ownership Rates Among Age Cohorts in Connecticut
2010 2011 2012 2013 2014 2015 2016 2017
29.00%
29.50%
30.00%
30.50%
31.00%
31.50%
32.00%
32.50%
33.00%
33.50%
34.00%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2010 2011 2012 2013 2014 2015 2016 2017
Source: American Community Survey - 5 Year Estimates
Rental Demand in Connecticut
Change in Renter Households Rentership Rate
August 2019 Planning, Research, & Evaluation Page 7 of 19
While Connecticut’s Rental rate appears to be slowing slightly, Connecticut has seen growth in the
number of higher income rental households. Rental households making $75,000 or more now make up
22.5 percent of all rental households in Connecticut, up from 17.6 percent in 2009.
60000
65000
70000
75000
80000
85000
90000
95000
100000
105000
Nu
mb
er o
f R
ente
r-O
ccu
pie
d H
ou
sin
g U
nit
s
Source: American Community Survey - 5 Year Estimates
Renter-Occupied Housing Units in Connecticut (Nominal Dollars)
Less Than $15,000 More than $75,000Renter Household Income:
August 2019 Planning, Research, & Evaluation Page 8 of 19
Vacancy
Ownership vacancy rates peaked in Connecticut, New England, and nationwide between 2007 and 2008
as the Great Recession and foreclosure crisis began. Connecticut’s vacancy rate reached 0.9 in 2004 and
jumped to 2.3 in 2007. Since then the states ownership vacancy rate has decreased to 1.5 which is
slightly less than the national rate of 1.6 but tops the New England rates. The decreased vacancy rate
since the height to the Great Recession is an indication of increased demand for housing in the state.
Rental vacancy rates in Connecticut peaked in 2010 at 10.7 percent, slightly higher than the national
peak at 10.2 the year prior. Since that time rental vacancy rates have dropped significantly. In 2017
Connecticut’s rate was slightly less than the national rate at 6.8 percent. Relative to historic trends,
Connecticut’s current rental vacancy rate is quite low indicating a strong rental market.
0.3
0.8
1.3
1.8
2.3
2.8
Vac
ancy
Rat
e
Source: U.S. Census Bureau, Current Population Survey/Housing Vacany Survey, February 28,2018
Ownership Vacany Rate
United States Connecticut Massachusetts
New Hampshire Rhode Island Vermont
Maine
0
2
4
6
8
10
12
Vac
ancy
Rat
e
Source: U.S. Census Bureau, Current Population Survey/Housing Vacancy Survey, February 28, 2018
Rental Vacany Rate
United States Connecticut Maine Massachusetts
New Hampshire Rhode Island Vermont
August 2019 Planning, Research, & Evaluation Page 9 of 19
Aging Housing Stock
Like much of New England, Connecticut generally has an older housing stock than the rest of the
country. The median year built in Connecticut according to the 2013-2017 ACS estimates, is 1964
relative to the national median of 1977. In New England, Rhode Island and Massachusetts had slightly
older housing with a median year built at 1960. New Hampshire had the newest housing in the region
with a median year built of 1977, which matches the national estimates.
Only 9 percent of the housing structures in Connecticut were built after the year 2000, relative to 13
percent nationally. Thirty percent of Connecticut’s housing was built between 1970 and 1999, twenty
seven percent between 1940 and 1969, and thirty three percent was built before 1940. Notably, of any
New England state, Connecticut has the highest share of its housing stock built prior to 1940.
13%
7%
8%
9%
15%
16%
18%
43%
31%
34%
30%
46%
41%
43%
18%
31%
36%
27%
20%
19%
26%
26%
31%
22%
33%
20%
25%
13%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
United States
Vermont
Rhode Island
Connecticut
New Hampshire
Massachusetts
Maine
Source: American Community Survey, 5 Year Estimates, 2013-2017
Year Housing Structure Built in Connecticut
2000 or Later 1970 to 1999 1940 to 1969 Pre 1940
August 2019 Planning, Research, & Evaluation Page 10 of 19
Single Family Home Sales Volume
Single family home sales in Connecticut peaked in 2004 with almost 68,000 homes sold that year.
Suffering from the effects of the Great Recession, home sales in Connecticut dropped to just under
31,000 in 2011. Since 2011, total sales in Connecticut have rebounded to about 49,500 in 2017 and
nearly 51,000 in 2018.
0
10000
20000
30000
40000
50000
60000
70000
Nu
mb
er o
f Sa
les
Source: Warren Group
Number of Single Family Home Sales by Connecticut County
Fairfield Hartford Litchfield Middlesex
New Haven New London Tolland Windham
August 2019 Planning, Research, & Evaluation Page 11 of 19
Single Family Home Values
Between 2001 and 2018, home prices in Connecticut peaked in 2007, just prior to the Great Recession.
In 2007, the median sales price for a single family residential property, including condominiums, in
Connecticut was $259,900 ($319,000 adjusting for inflation) while the median price in 2018 was
$229,500. As seen in the Federal Housing Finance Agency’s Purchase-Only House Price index (HPI),
Connecticut like the U.S. at large lost significant ground in home prices between the years of 2006 and
2012, and has struggled to keep pace with home price gains in other New England States and the
country overall. As of July, the median sales price in Connecticut in 2019 stands at $223,000.
75
125
175
225
275
Source: Federal Housing Finance Agency - Purchase Only HPI
Seasonally Adjusted House Price Index (BY=1991)
CT
US
MA
NH
RI
VT
ME
August 2019 Planning, Research, & Evaluation Page 12 of 19
-8
-6
-4
-2
0
2
4
6
8
Source: Federal Housing Finance Agency - Seasonally Adjusted Purchase Only HPI
Quarterly Percentage Change in House Price Index U.S. vs CT
United States Connecticut
100000
150000
200000
250000
300000
350000
400000
450000
500000
550000
600000
Med
ian
Sal
es P
rice
Source: Warren Group
Real Median Home Sale Price by Connecticut County
Fairfield Hartford Litchfield
Middlesex New Haven New London
Tolland Windham
August 2019 Planning, Research, & Evaluation Page 13 of 19
Foreclosures
The number of foreclosures in Connecticut spiked in both 2010 and 2014 as Connecticut made its way
through the Great Recession. In 2010 alone, nearly 6,200 homeowners in Connecticut lost their homes
as a result of a foreclosure.
As seen in the map below, the spike in foreclosures was felt disproportionately across the state. Eastern
Connecticut has had the highest foreclosure rates since 2008. Towns like Sterling and Plainfield have had
the highest cumulative foreclosure rate since 2008 at 9.06 and 7.53 percent of the total housing stock in
each town has been foreclosed upon. Urban centers like Waterbury, Meriden, and Bridgeport have also
had high rates of foreclosure, at 7.35, 7.39, and 6.41 respectively. Bridgeport had the highest number of
foreclosures during that time period with 3,652 foreclosures, followed by Waterbury, New Haven, and
Hartford with 3,528, 2,357, and 2,162 respectively.
0
500
1000
1500
2000
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
Qtr
1
Qtr
3
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Nu
mb
er o
f Fo
recl
osu
res
Source: Warren Group
Foreclosures By Connecticut County
Fairfield Hartford LitchfieldMiddlesex New Haven New LondonTolland Windham
Source: Warren Group Foreclosures & Decennial Census, Total Housing Units, 2010
August 2019 Planning, Research, & Evaluation Page 14 of 19
Housing Construction
Housing construction like many other market indicators, has struggled to recover since the Great
Recession. Since 1960, Connecticut has built an average of about 13,200 units per year, the bulk of
which occurred prior to 1990. Since 1990, an average of 7,700 units have been built per year with a
significant drop off during and after the Great Recession.
New construction permits in Connecticut kept pace with other New England states and the U.S.
generally prior to 2010. Since then, Connecticut has not kept pace with its neighbors in new
construction permits. Connecticut, New England, and U.S. generally saw roughly half the level of new
construction relative to 1995 levels.
0
5000
10000
15000
20000
25000
30000
Source: Census Building Permits Survey (Annual Since 1959)
New Privately-Owned Housing Units by Type in Connecticut
1 Units 2 to 4 Units
5 or more units Units Historic Average
30
50
70
90
110
130
150
170
Source: Census Bureau, Building Permits Survey, New Privately Owned Housing Units Authorized, Unadjusted
Building Permits Issued (Indexed to 1995)
US Connecticut New England (RI, MA, VT, NH, ME)
August 2019 Planning, Research, & Evaluation Page 15 of 19
According to the JCHS, housing construction should exceed household growth by 30 percent to
accommodate for demolitions, second homes, and to ensure a stable vacancy rate. While new housing
construction had been slow to recover, so too has new household formation. Between 2011 and 2015,
Connecticut generally either lost or kept the same number of households. In 2016 and 2017, the state
added 2,130 and 7042 households respectively.
-5000
-3000
-1000
1000
3000
5000
7000
Source: DECD Building Permits and Demolitions & ACS 5 Year Estimates
Change in Total Households versus Net New Housing Units in Connecticut
Net New Units (Permits Minus Demolitions) Change in Households
August 2019 Planning, Research, & Evaluation Page 16 of 19
Affordability
According to the housing cost data from the 2013-2017 ACS estimates, 36.77% of Connecticut
households are considered to be cost burdened, meaning they spend more than 30 percent of their
income on housing costs. By tenure, renters in Connecticut are far more likely to be cost burdened than
owners. Statewide, 29.45 percent of owners, both with and without a mortgage, are considered cost
burdened compared to 52.29 percent.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
Less than 20.0percent
20.0 to 24.9percent
25.0 to 29.9percent
30.0 to 34.9percent
35.0 percent ormore
Source: American Community Suvery, 5 Year Estimates, 2013 - 2017
Gross Housing Costs As a Percentage of Household Income in Connecticut Connecticut
Owners Renters
Source: American Community Survey, 5 Year Estimates, 2013 - 2017
August 2019 Planning, Research, & Evaluation Page 17 of 19
Since 2006, according to the one year ACS estimates, cost burden rates among owners have dropped
significantly. In 2006, 34.8 percent of owners were considered cost burdened while in 2017, just 27.5
were considered burdened. At the same time, little has changed on the rental side. In 2006, 47.6
percent of renters in Connecticut were considered cost burdened while in 2017, that number had
increased to 48.3 percent. Cost burden rates among both renters and owners are down from their peaks
in 2010 and 2011.
27.527.230.030.831.5
34.336.136.736.136.235.434.8
48.348.149.149.749.349.65250.549.448.247.547.6
0.0
10.0
20.0
30.0
40.0
50.0
60.0
201720162015201420132012201120102009200820072006
Source: American Community Survey - 1 Year Estimates
Renter and Owner Cost Burdens in Connecticut
Owner Cost Burden Renter Cost Burden
August 2019 Planning, Research, & Evaluation Page 18 of 19
Mortgage Originations
According to Home Mortgage Disclosure Act (HMDA) data provided by the Consumer Financial
Protection Bureau (CFPB), mortgage originations total $16.7 billion in 2017. Home purchase originations
reached $10.63 billion, their highest level since 2007. Notably, due to the low interest rate environment
between 2008 and 2015 refinance mortgage made up the majority of all originations in Connecticut. In
2016 home purchase mortgages became the majority of originations for the first time since 2007.
12.52
8.13 6.89 7.05 6.3 7.1 8.56 8.16 8.89 9.7 10.63
0.83
0.660.65 0.54 0.56
0.680.67 0.43
0.640.65
0.52
11.72
10.19
19.8 18.28
15.15 20.8515.01
5.57
8.479.55
5.56
6.346.03
5.044.69
4.45
3.663.98
4.173.85
3.653.99
0
1
2
3
4
5
6
7
0
5
10
15
20
25
30
35
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: CFPB - Home Mortgage Disclosure Act (HMDA) 2007-2017 & St. Louis Federal Reserve
CT Single Family Mortgage Originaitons ($ Billions)
Home Purchase Home Improvement Refinance Average 30 Year Fixed Rate
August 2019 Planning, Research, & Evaluation Page 19 of 19
Generational Trends
Connecticut has an older population than the U.S. population generally. According to the most recent
American Community Survey estimates, Connecticut’s median age is 41 compared to a median of 38
nationally. As seen below, Connecticut has a great proportion of Baby Boomers, older Gen-Xs, and
younger millennials. Relative to the U.S. population, Connecticut is lacking in Millennials and younger
Gen-Zs.
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
Gen Z Millennials Gen X Boomers Silent GI Gen
Source: ACS Population Estimates via IPUMS-USA
Generational Cohorts - United States and Connecticut
US Population CT Population