Filtered by Subscriptions: US Housing Use setting US Housing
The jump in multifamily housing starts in the first half of 2022 implies a surge in completions over the next couple of years to a multi-decade high. But while rental demand is now moderating, the continued lack of homes for sale means we doubt it will …
1st September 2022
House price growth hits the buffers House price growth hit the buffers in June, with Case-Shiller and FHFA reporting a sharp slowdown in month-on-month gains. Higher mortgage interest rates have stretched affordability and cut housing demand, shifting …
30th August 2022
With the vast majority of mortgage borrowers protected by fixed rates, it is not a surprise that the early delinquency rate has risen only marginally since the start of the year. And our forecasts for real incomes to recover and the unemployment rate to …
24th August 2022
Another sharp decline in sales, but further falls likely to be more gradual New home sales dropped sharply again in July on the back of rising mortgage rates. Stretched affordability will continue to weigh on housing market activity over the second half …
23rd August 2022
Existing home sales extend run of declines Higher mortgage rates led to another fall in existing home sales in July, which are now down by 26% from their peak in January. We expect a further fall of close to 5% by end-2022 to 4.6m annualised. From there, …
19th August 2022
Housing starts falling sharply as buyer traffic dries up Single-family housing starts fell for the fifth consecutive month in July, leaving them down by 25% from their high at the end of 2021. Leading indicators point to a much larger decline in the …
16th August 2022
Overview – Despite a reduction in our mortgage rate forecast, affordability is still set to be as stretched as it was during the mid-2000s housing boom. Alongside record-low homebuyer sentiment and a slowing economy, that means we have become more …
12th August 2022
The odds are stacking up against first-time buyers (FTBs), an important demographic for homeownership. A very limited number of starter homes on the market, higher interest rates, tight credit conditions and a weak outlook for new home sales all point to …
5th August 2022
No respite for mortgage demand Both refinancing and home purchase activity continued to trend lower in July, with the latter down by around 30% since the start of the year. Against a backdrop of stretched affordability and record-low homebuyer sentiment, …
3rd August 2022
The current surge in homes under construction has few parallels with the building boom that preceded the house price crash in the late 2000s. The build-up of homes under construction has largely been caused by delays in sourcing materials and labour, …
29th July 2022
Weak sales are consistent with our call for a fall in house prices Case-Shiller reported a slowdown in month-on-month house price growth in May, adding to the signs that the housing market is cooling rapidly. The annual growth rate dropped below 20% and …
26th July 2022
Sales fall below pre-pandemic level and are set to fall further Existing home sales dropped again in June, taking them to below their pre-COVID peak. With affordability looking as stretched as it was during the Global Financial Crisis (GFC), home buyer …
20th July 2022
Sharp fall in homebuilder confidence points to further decline in starts Single-family housing starts fell by a sizeable 8.1% m/m in June, following a 9.0% m/m drop in May. With rising mortgage rates continuing to weigh on demand, homebuilder confidence …
19th July 2022
The upward trend in mortgage rates took a breather over the past month, but that didn’t provide much of a boost to housing market activity. Existing home sales have fallen for four months in a row, and a sharp decline in the Fannie Mae Home Purchase …
15th July 2022
Overview – Since the release of our previous Apartment Metro Outlook three months ago the interest rate environment has become more negative for real estate, and we now expect yields to rise in many metros this year and to see further increases in 2023. …
12th July 2022
Home purchase demand remains low as rates ease back Mortgage applications for home purchase saw a slight recovery over the course of June as mortgage interest rates eased back. But demand remains depressed compared to its pre-COVID-19 level and a further …
6th July 2022
In contrast to the mid-2000s, there seems little chance of a significant loosening in mortgage lending standards in response to higher interest rates today. Traditional banks have not forgotten the financial crisis and, after a 37% rise in house prices in …
1st July 2022
House price growth starts to slow, and will eventually turn negative House price growth is finally showing signs of slowing, in line with measures of housing market activity which peaked at the start of the year. Soaring mortgage rates are shutting some …
28th June 2022
Measures of housing market activity and prices tend to follow a predictable sequence in downturns. In this Update we highlight the key US and UK variables that clients should follow to track the housing downturn and identify turning points. With most …
24th June 2022
New home sales show a surprise increase New home sales rose in May, bucking widespread signs of a housing market slowdown. But given the volatility in the data we wouldn’t put too much weight on one month’s reading. After all, new home sales are not …
Existing home sales on a steady downward track as mortgage rates rise Surging mortgage rates led to another fall in existing home sales in May to their lowest level since the height of the COVID-19 lockdowns two years ago. And with mortgage rates set to …
21st June 2022
We have previously argued that a mortgage rate of above 6% represents the threshold at which house price falls become likely. With rates recently rising above that level, we are therefore revising down our house price forecast. That said, the prevalence …
20th June 2022
Housing starts falling rapidly as higher mortgage rates curb demand Housing starts in May recorded their largest month-on-month decline since the height of the COVID-19 pandemic. A fall in housing demand due to higher mortgage rates is occurring at the …
16th June 2022
Leading indicators are pointing to a large fall in existing home sales. For example, the recent sharp decline in the NAR buyer traffic balance is consistent with a fall in sales to 4.5m annualised which, excluding the COVID-related dip of 2020, would …
14th June 2022
Housing activity is slowing in the face of higher mortgage interest rates. Mortgage applications for home purchase dropped to a two-year low in May, existing homes sales have declined in each of the three months to April and new home sales recorded their …
9th June 2022
By increasing the demand for accommodation and boosting rents, the shift to remote work will have put some upward pressure on house prices. But while rents have seen an above-trend increase since the end of 2019, that would only have boosted house prices …
1st June 2022
Mortgage demand sees further falls even as interest rates edge back A small fall in mortgage rates over the second half of May failed to arrest a downward trend in mortgage demand, with applications for home purchase ending the month at a two-year low. …
House price growth hits new records, but will slow rapidly from here House prices surged in March, with Case-Shiller reporting record gains on both a monthly and annual basis. That reflects the jump in housing demand seen over the turn of the year, when …
31st May 2022
Rental growth in NYC reached 22% y/y in Q1 2022, one of the fastest rates in the country. But we expect growth to cool rapidly from here and underperform other cities. The past surge in rents largely reflects a reversal of large falls in 2020, which …
25th May 2022
New home sales drop to a two-year low 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 …
24th May 2022
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 …
19th May 2022
Buyer traffic drops sharply as higher mortgage rates bite 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 …
Housing starts drop back as higher interest rates curb demand 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 …
18th May 2022
The rise in mortgage rates, to a 12-year high in mid-April, is now starting to weigh on housing market activity, with new and existing home sales falling back over the past couple of months. (See Chart 1.) With rates set to increase to 5.6% by mid-2023, …
10th May 2022
Homebuyers looking for more space were contending with low numbers of larger homes for sale in the first quarter, not helped by an apparent rise in investor demand for bigger properties. But rising mortgage rates will encourage owners of vacant homes to …
5th May 2022
Rise in mortgage rates dampens home purchase demand The sharp rise in mortgage rates over the past couple of months, to a 12-year high of 5.37% in the middle of April, is now weighing on mortgage demand. Home purchase applications dropped to their lowest …
4th May 2022
Overview – Mortgage rates have risen faster than we originally anticipated and we now expect them to peak at 5.6% in mid-2023. That’s below the level of around 6% which we think risks tiggering a housing market correction, but higher interest rates mean …
29th April 2022
Month-on-month house price growth hits record high Month-on-month house price growth rose to a record high in February, as households desperate to buy before interest rates increased bid up the price of those few homes for sale. But the surge in mortgage …
26th April 2022
Rising mortgage interest rates and tight credit conditions pushed the cash buyer share of existing home sales to a six-year high in March. But while the cash buyer share and house price growth are loosely correlated, we don’t think such buyers will be …
21st April 2022
Higher mortgage rates weigh on home sales Surging mortgage interest rates pushed March existing home sales down to their lowest since the height of COVID-19-restirctions in mid-2020. We expect mortgage rates to rise further over the next year, and that …
20th April 2022
Starts rise but face headwinds from materials shortages Housing starts rose a by a marginal 0.3% m/m in March, driven by the volatile multifamily sector. Single-family starts saw a small fall, as did building permits. While we expect new home demand to be …
19th April 2022
The surge in mortgage rates means home buyers with a mortgage preapproval from late January will see a rise in mortgage payments of 15% if they can’t find a home before their approval expires at the end of April. That is making them desperate to find a …
13th April 2022
Mortgage rates are set to rise to over 5% within the next couple of weeks which will help cool, but not crash, housing market activity. Pent-up demand from the last couple of years as buyers have struggled to find a home, and the continued need for more …
8th April 2022
Overview – Following a surge last year, rental growth at the national level is set to slow over the next couple of years as demand falls back and affordability constraints bite. (See Focus. ) Alongside a gradual rise in yields, that will bring total …
7th April 2022
Mortgage rates rise toward 5% Mortgage rates continue their upward climb in March, reaching a 40-month high of 4.9% by the end of the month. As yet, that has done little to cut home purchase demand. Indeed, applications saw a marginal increase last month. …
6th April 2022
House price growth starts 2022 on a strong note, but will slow this year The rebound in house price inflation seen at the end of last year continued into 2022, with annual growth on the Case-Shiller measure moving back above 19%. But housing market …
29th March 2022
We think that property markets are the weak link when it comes to the impact of tightening monetary policy. A modest rise in interest rates might only cause price falls in a few obvious candidates. But rates might have to rise only a bit further than we …
25th March 2022
Decline in new home sales not the start of a downward trend New home sales fell for the second month in a row in February, as builders limited them to catch-up with the backlog of homes under construction. Higher mortgage rates will act to cool overall …
23rd March 2022
The jump in the spread between mortgage rates and the 10-year Treasury yield primarily reflects a rise in the credit risk premium as investors react to a slowing economy, surging inflation, and the war in Ukraine. As the economic outlook becomes more …
Home sales fall back as higher rates bite Existing home sales slipped in February, more than reversing January’s surprise increase. And the Fed’s first move on interest rates this week reinforces our expectation that existing sales will remain soft in the …
18th March 2022
