Household formation stalls as costs mount

After seeing strong gains over most of 2021, household formation stalled in the final quarter. A lack of homes for sale and rent, and the soaring cost of both tenures, is constraining household formation. To the extent that it is affordability that is constraining formation and housing demand, that implies rental growth will slow this year. We expect REIS effective rental growth to drop from 12% y/y at the end of last year to around 4% y/y by the end of 2022.