Filtered by Subscriptions: US Housing Use setting US Housing
Starts rise but face headwinds from materials shortages Housing starts rose by 5.7% m/m in February following two months of declines. While a tight inventory of existing homes is supporting homebuilder confidence, shortages of labour and materials will …
17th March 2022
A rise in mortgage rates to their highest since May 2019 has cooled housing market activity, with mortgage applications for home purchase dropping to a 31-month low in the last week of February. (See Chart 1.) Admittedly, the war in Ukraine pushed …
11th March 2022
Rental growth hit record highs last year as a wave of pent-up demand, plenty of savings, the need for more space and lack of homes for sale all drove rental household formation higher. But some of those factors supporting demand are now starting to fade, …
4th March 2022
Mortgage demand drops, but mortgage rates now set to fall back Mortgage rates rose further in February, reaching their highest since May 2019. That weighed on mortgage demand, with applications for home purchase falling to their lowest level since the …
2nd March 2022
House price-to-earnings ratios are approaching the peak hit just before the global financial crisis, and another year of strong house price growth would send them above that level. But while mortgage payments as a share of income are set to reach 15-year …
1st March 2022
New home sales dip, but lack of existing home inventory will support demand After two strong months new home sales edged back in January and may dip further early in the year as the surge in borrowers who sought to buy prior to further interest rate rises …
24th February 2022
House price growth records strong end to 2021 Annual house price growth held steady in December, with prices up 18.8% over 2021. But with mortgage rates now at their highest since July 2019, affordability constraints will soon cut the amount potential …
22nd February 2022
Home sales surge as buyers rush to lock in low financing costs Existing home sales jumped 6.7% m/m in January, but that gain is likely to prove short-lived. Strong activity over the turn of the year is due to households rushing to buy to lock in a low …
18th February 2022
Working from home has increased the demand for larger properties, and in response the median size of new homes started at the end of last year was the largest since the start of 2019. Supporting that move to larger properties has been a shift to building …
Single-family starts set for another, albeit more modest, rise in 2022 Single-family starts fell for the second month in a row in January, but a rise in building permits to a one-year high means they will soon resume their upward trend. New home sales …
17th February 2022
We believe the link between real estate cashflows and inflation to be overplayed, a view that is backed up by the evidence of the last 44 years. But there are exceptions. One of which is low vacancy rates, which support strong NOI growth, as we expect in …
10th February 2022
The average home purchase mortgage size has ballooned over the past couple of years, but a concurrent rise in down payments will protect lenders from all but the most severe of house price shocks. Looking ahead, with the household saving ratio dropping …
House prices and rents both boomed in 2021, but are set for a quieter 2022. Mortgage rates are now rising and we expect the 30-year rate will end the year at around 4%. Combined with the rise in house prices that will push mortgage payments as a share of …
8th February 2022
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 …
3rd February 2022
Borrowers rush to secure a mortgage before rates rise further Mortgage rates rose to a two-year high of 3.78% in the last week of January. As yet that has done little to cool home purchase demand, with applications increasing to a one-year high. But a lot …
2nd February 2022
Overview – Mortgage rates are on the rise, and we expect the 30-year rate will increase to 4.0% by end-2022 and 4.5% by end-2023. While that only takes mortgage rates back to where they were in early 2019, house prices have risen 30% since then. With …
28th January 2022
Lack of existing home inventory drives buyers to uncompleted new homes New home sales had a strong end to the year, as the record low number of existing homes on the market drove the sale of homes which were still under construction. That lack of existing …
26th January 2022
Stage set for a slowdown in house price growth Case-Shiller reported annual house price growth falling for the third consecutive month in November. And with rising mortgage rates set to stretch affordability to its worst since 2008, we expect annual house …
25th January 2022
Home sales dip in December, and are set for further declines in 2022 Despite a 4.6% m/m fall in existing home sales in December, 2021 marked an impressive year for existing home sales, with sales 8% higher compared to 2020. But looking ahead, a backdrop …
20th January 2022
A rise in mortgage rates to 4.0% by end-2022, coupled with the 25% rise in house prices seen since mid-2020, will boost mortgage payments as a share of earnings to their highest since mid-2008. That will lead to a 4% fall in existing home sales this year, …
19th January 2022
Strong demand keeps housing starts, if not completions, elevated Single-family starts edged back in December, but they saw a 12.1% y/y rise in 2021 overall as strong housing demand and a lack of existing homes for sale supported new home sales. Rising …
Housing market activity had a strong end to 2021, with sales and starts both rising. However, after a brief dip due to concerns over Omicron, mortgage rates resumed their upward trend and reached a nine-month high by the end of the year. A further rise in …
11th January 2022
Shortages of materials and labour over the past year have not stopped builders from starting a lot more single-family homes. But they do appear to have prevented them from finishing them. That implies a surge of homes will be completed later this year as …
6th January 2022
Mortgage rates resume their upward trend After a brief dip due to concerns over the Omicron variant, both the 10-year Treasury yield and 30-year mortgage rate have since resumed their upward trends, with the latter rising to a nine-month high by the end …
5th January 2022
Soaring house prices mean cheaper new homes are no longer available The healthy rise in new home sales in November primarily reflected a downward revision to the previous month’s reading. Nevertheless, new sales activity is still elevated compared to its …
23rd December 2021
Sales resurgence pushes inventory to a record low Existing home sales continued to climb higher in November, leaving sales just short of their peak last year. But we expect a tight inventory and stretched affordability as mortgage rates rise to weigh on …
22nd December 2021
Overview – Apartment markets in major coastal cities underperformed the national average in 2021, as they were more heavily impacted by lockdowns and the move of some households to cheaper, sunbelt cities. But as long as Omicron doesn’t throw a spanner in …
17th December 2021
Housing starts bounce back, but so do lumber prices 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 …
16th December 2021
The pandemic turbo-charged a move away from major coastal cities, and that drop in demand led to a sharp fall in their rents relative to the national average. But with those moves now made and cities reopening, we doubt they will continue to get cheaper. …
9th December 2021
Housing market activity has surprised on the upside over the past month and home sales look set for a strong end to the year. Even as mortgage rates increased to an eight-month high, home purchase mortgage applications have surged, pending home sales are …
7th December 2021
Home purchase demand surges even as mortgage rates rise A rise in mortgage rates to an eight-month high of 3.31% by the end of November failed to dampen home purchase demand, which surged to a nine-month high. The drop in 10-year Treasury yields from the …
1st December 2021
House price growth begins to slow Annual house price growth fell for the first time in 16-months in September, and stretched affordability means it should continue to slow. It is too soon to say what impact the arrival of the Omicron variant will have on …
30th November 2021
An increase in the quality of mortgage borrowers, and record low inventory, are boosting the mortgage closing rate and leading to an increase in the share of pending home sales converted into existing home sales. Those factors are not set to go into …
29th November 2021
Healthier inventory to support new home sales The marginal improvement in new home sales in October was flattered by a downward revision to September’s data, and the bigger picture is that sales have been fairly steady since May. Looking ahead housing …
24th November 2021
Home sales to fall back slowly Existing home sales eked out a small gain in October, slowing considerably from last month’s increase. With inventory at a record low, buyer sentiment in a pit and mortgage rates on the rise, we expect sales will fall back …
22nd November 2021
The announcement that the Fed will start to taper its purchases of MBS this month is not set to widen mortgage spreads. The cut in demand will be gradual and offset by a moderation in the supply of MBS as home sales decline. With the cost of the …
18th November 2021
Single-family starts drop again, but signs of hope in permit data Single-family starts dropped for the fourth consecutive month in October to a 15-month low. But we expect starts will soon turn the corner. New home demand is strong, lumber prices have …
17th November 2021
Low mortgage rates, strong earnings growth, plenty of cash savings and a surge in home equity have pushed the early mortgage delinquency rate to a record low this year. Most of those factors will continue to support borrowers over the next couple of …
15th November 2021
The homeowner and rental markets are starting to swap places, with home sales and prices cooling as rental demand and rents take off. Rising mortgage rates have started to bring housing demand down, and we expect they will rise further over the next …
10th November 2021
Despite the exodus from cities and booming home sales last year, the homeownership rate in the third quarter was virtually unchanged from its level prior to the arrival of COVID-19. And with soaring house prices and tight credit conditions shutting out …
4th November 2021
Housing demand dips as mortgage rates rise Mortgage rates rose to an eight-month high in October, which drove a significant decline in refinancing activity. But home purchase demand saw a much smaller dip, and we expect it will trend down only gradually …
3rd November 2021
Overview – Mortgage rates have risen to a six-month high and will increase further over the next couple of years. While inventory is set to remain tight, cutting the risk of an outright fall in house prices, that rise in interest rates coupled with tight …
28th October 2021
House prices growth starts to cool The FHFA reported that annual house price inflation declined in August for the first time since May 2020. Rising mortgage rates mean that slowdown will continue, and we expect it to fall back to 3% y/y by end-2022. …
26th October 2021
Americans are returning to cities, but the return to the office has been much slower. We see suburban areas being net winners in the residential and retail sectors, although the picture for downtown versus suburban offices is less obvious than the …
22nd October 2021
Increased demand for larger homes to accommodate working from home and continued migration to the sunbelt will support housing demand even as population growth slows. We therefore don’t think the recent surge in housing starts, and rise in the number of …
Home sales rise, but improvement will be short-lived The 7.0% m/m rise in existing home sales in September does not mark the start of an upward trend in activity. With mortgage rates rising, inventory close to record lows and home buying sentiment at …
21st October 2021
Single-family starts flat as strong demand runs up against supply constraints Single-family starts and building permits have been stable over the past three months at around 1.1m annualised, as strong new home demand has run up against shortages of …
19th October 2021
Mortgage rates are on the rise and we expect they will see further gains to end the year at around 3.5%. That, alongside relatively tight credit conditions, will help cool rampant house price inflation. From close to 20% y/y in July, we expect a slowdown …
15th October 2021
Sales of condos have been on tear in recent months, with their share in total existing home sales reaching a 14-year high in June. The reopening of cities helps explain that development, and condo sales have also benefitted from comparatively favourable …
7th October 2021
Mortgage rates start to rise Home purchase applications rose for the first time in six months in September, even as mortgage rates increased to a 14-week high by the end of the month. But we expect a further rise in mortgage rates to around 3.5% by the …
6th October 2021
