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Existing Home Sales (Jun)

Existing home sales edged higher in June, but the bigger picture is that housing market activity is cooling. Booming house prices, rising mortgage rates and tight inventory will weigh on demand this year. As a result, we expect sales to resume their downward trend to around 5.6m annualised by end-2021.
Sam Hall Assistant Property Economist
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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

US Housing Market Data Response

Housing Starts (Apr.)

Housing starts dropped by a marginal 0.2% m/m in April, driven by the single-family sector which also saw building permits fall for the second month in a row. Housing demand is faltering due to a surge in mortgage interest rates to a 12-year high, which helped push homebuilding confidence to a two-year low in May. That said, pent-up demand from the past couple of years means we are not expecting a crash in housing market activity, and single-family starts will fall gradually to around 1m annualised by end-2022.

18 May 2022

More from Sam Hall

US Housing Market Data Response

Housing Starts (Jun.)

Single-family housing starts rose by 6.3% m/m in June. Despite this, even after the sharp decline in lumber prices in recent weeks there are still signs that supply shortages are holding back construction. But as these constraints ease, builders will make a start on the backlog of delayed projects and that should help starts average 1.16m this year, up 16% on 2020.

20 July 2021

US Commercial Property Update

Bounce in high-rise demand to give way to gardens

There is mounting evidence that the exodus from cities is winding down. As economies reopen, we think that cities will come back to life, bringing a wave of new demand for high-rise apartments. But once the dust settles, the shift to working from home will help garden apartments outperform.

9 July 2021

US Housing Market Data Response

Mortgage Applications (Jun.)

Home purchase mortgage applications fell back again in June, leaving them down 23% compared to the 11-year high seen in January. Tight inventory and stretched affordability are largely responsible for the recent downward trend in housing demand and we expect these factors will persist throughout the year.

7 July 2021
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