New-home sales have shown resilience during recent economic challenges.
Despite the understandable dip in April, mortgage applications jumped to an 11-year high in June, according to a recent report from the Mortgage Bankers Association.
A key reason is historically low interest rates. As of mid-June, the average rate for a conventional 30-year fixed loan was 3.13% – down from a peak of 4.94% in late 2018.
This rate drop saves about $850 each month on a typical mortgage for a median-priced Irvine home – attracting those looking to move off the sidelines to Irvine’s new villages.
But it’s not just historically low interest rates that make Irvine attractive.
“Irvine’s great advantage has been the Master Plan,” says Joel Kotkin, a presidential fellow on city futures at Chapman University. “It’s provided what people want.”
And what people want these days – perhaps now more than ever – are healthy environments.
“People want to hike. People want to see nature. Irvine was farsighted enough to provide all of this,” he says.
Kotkin describes Irvine as a “hybrid” environment that offers both the best of a suburban environment (such as village parks and schools) with urban-like amenities (such as the Irvine Spectrum District’s office towers, entertainment and restaurants).
This hybrid environment is one reason Irvine was ranked in the top 10 in the U.S. for healthy communities. It’s also a key reason many large cities, including Los Angeles, Chicago and New York, are losing population.
An accelerated trend
Kotkin doesn’t believe these shifts from densely populated cities to suburban environments are all due to the pandemic, either.
This has been happening for a while, he says. And it will continue to drive demand in places like Irvine well into the future.
“A lot of these trends were already happening,” Kotkin recently told C-SPAN. “The populations of (these cities) were all dropping before the pandemic.”
Kotkin continued: “There has been a change that has begun to develop in which people begin to say, ‘Do I really want to be on a train, be on a subway, be in crowded places?’ ”
Irvine’s village design, on the other hand, offers a balance of sought-after amenities surrounded by America’s largest urban open space network to explore and admire.
Whether in good times or challenging times, it is this balance that makes Irvine homes so desirable.