Housing demand is finally responding to a strong economic backdrop and record low mortgage interest rates. But with the numbers of homes for sale at historic lows, that increased demand is feeding through to higher prices rather than increased transactions. However, given the very high level of house prices, there is a limit to how much further they can rise. Beyond 2015 a gradual rise in interest rates, and increase in the supply of homes from both the new and existing sectors, will lead to a prolonged period of prices growing below earnings.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services