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Housing Starts (Nov.)

Single-family housing starts rebounded in November, following a weak four months. While strong new home demand, limited inventory and surging house prices will incentivise builders to increase construction, the recent surge in lumber prices will add to the supply-side challenges weighing on starts.
Sam Hall Assistant Property Economist
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US Housing Market Data Response

New Home Sales (Apr.)

New home sales dropped sharply to a two-year low in April. But while rising mortgage rates are weighing on sales, the drop looks large given the fall in mortgage applications seen so far and may be revised up over the next couple of months. After all, plenty of pent-up demand from the past couple of years will provide some support to sales, and we expect new sales will end the year at around 700,000 annualised.

24 May 2022

US Housing Market Update

Mortgage debt service ratio to remain low

The surge in mortgage rates has led to a sharp deterioration in home affordability. But that doesn’t mean the mortgage debt service ratio, the share of disposable income spent on mortgage payments, will also surge from its current low level. Existing borrowers are protected by long-term fixed mortgage rates, and tight credit conditions argue against a large rise in debt-to-income ratios for new buyers. While home sales will take a hit from higher interest rates, the housing market will remain resilient to future shocks.

19 May 2022

US Housing Market Data Response

Existing Home Sales (Apr.)

Existing home sales fell once again in April, although for now they remain above their pre-COVID-19 level. But, with mortgage rates set to stay high and credit conditions unlikely to loosen significantly, sales will fall further this year. Indeed, buyer traffic dropped sharply in April. We expect sales will fall back to around 5m annualised by end-2022.

19 May 2022

More from Sam Hall

US Commercial Property Data Response

Commercial Property Lending (Nov.)

Commercial real estate debt recorded its largest gain in November since the onset of the pandemic. And with investment volumes on track for a record-breaking year, we expect lending activity to remain elevated in the coming months.

13 December 2021

US Commercial Property Data Response

US Metro Employment (Oct.)

The easing of the Delta wave of infections in the South boosted leisure & hospitality hiring in October. Meanwhile, office-based jobs rose in all 30 metros, following widespread declines in September. That left office-based employment above its pre-COVID level in 17 metros.

2 December 2021

US Commercial Property Valuation Monitor

Industrial overvalued, but supported by rental outlook

Rising equity earnings yields and government bond yields squeezed property valuations in Q3. While pricing still looks reasonable at the all-property level, the industrial sector is starting to look overvalued on a historical basis, with yield falls showing no sign of slowing. At this stage, we think that industrial valuations are justified by the sector’s solid prospects for rental growth. But we expect 10-Year Treasury yields will rise to 1.6% by end-2021 and 2.25% by end-2022, which will squeeze property valuations further.

24 November 2021
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