New trends in real estate show changing US market

During the past three years a number of unprecedented trends have been taking place in the real estate market. Here are some examples:

* The rate of home ownership (proportion of families owning a house) has been dropping for the first time in decades.

* More single women are buying homes and becoming actively involved in real estate investments.

* The size of new homes being bought has been shrinking in relation to those of other families in the same income bracket.

* Monthly payments on home-mortgage loans have increased substantially - even on comparably priced homes.

Until 1980, the rate of home ownership had been steadily increasing since the US Census Bureau began keeping records.

In 1940, about 43.6 percent of all households were homeowners. In 1950, the rate had grown to 55 percent. In 1960, it was 61.9 percent; and in 1970 it was 62.9 percent. Since then, however, it has fallen to about 59.7 percent.

Most housing experts do not view the unprecedented downward turn as a particularly ominous or permanent phenomenon. They see it rather as a temporary setback caused by high prices and interest rates.

One phase of the real estate market that has continued to grow and flourish in recent years is the activity of single women in home buying and real estate investing. For the first time, women have become a major factor in the purchase and management of real estate.

The biggest impetus to the single-women boom in real estate sales was passage of the Equal Credit Opportunity Act of 1974, which prohibits creditors from discriminating on the basis of sex or marital status in any aspect of a credit transaction.

Further, an amendment to the Fair Housing Act now prohibits sex discrimination in the sale or rental of housing and in home finance.

These new laws, coupled with the general trend toward a more progressive business approach by women, is resulting in far more home-purchase transactions. Single women buy more than one-third of all condominiums.

Women also are becoming more active in investment real estate transactions and management. In Santa Barbara, Calif., for example, 13 women have joined to manage more than $100 million worth of real estate, with about $10 million in annual rents.

After many years of increasing in size, the average new American home has been shrinking during the past three years.

A recent study focused on homes purchased by families with an annual income of about $35,000. In 1979, the average size of those homes was 2,200 square feet; in 1980, it was 2,000 square feet; this year it is 1,800 square feet.

The study, conducted by Runzheimer & Co., showed the size of those newly purchased homes has decreased 18 percent since 1979. During that same period, the interest rate on home loans increased by 65 percent. Also, even though the size of the home's living area was shrinking, the average monthly payments (debt service) increased - from $660 in 1979 to $910 in 1982.

Now that interest rates are declining, however, the tide may soon turn. Buyers may soon realize they can afford more house, both in size and amenities.

Considering current and projected factors in the real estate market, this appears to be a particularly good time to buy a house. Despite concerns that home prices may climb as financing becomes more available, high interest rates have put the brakes on home sales for some time. Thus, a sizable inventory of unsold homes must be marketed before prices can rise significantly.