Filtered by Subscriptions: US Housing Use setting US Housing
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. …
1st June 2022
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
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
