Home sales volume last year was up modestly over 2010, but there was an important shift in their composition: Investors were stepping up to buy while households dropped back. There’s a positive side to this. Surveys show that households getting into the market are doing so for all the right reasons. They’re seeking a different home or another neighborhood just so they can flip the house at the first sign of market change.
These buyers are getting in at the low point of the housing cycle, so meaningful wealth gains over the next few years are inevitable even though financial considerations are not their principal motivation.
Looking ahead, we could see a greater unequal distribution of net worth over time as home prices rise. Those who will benefit the most are those who, like many investors and some households, are buying during this low point.