Filtered by Subscriptions: US Housing Use setting US Housing
The reduction in MBS held on the Fed’s balance sheet is, for now, set to continue in 2019. But while the announcement of MBS purchases in late 2008 led to a sharp drop in mortgage rates, we don’t think its reversal will boost rates today. A gradual …
1st February 2019
New home sales surged 16.9% m/m in November, but activity is likely to level off in 2019. While mortgage rates are set to drop back, a slowing economy will weigh on buyer sentiment, and that will keep any growth in sales to a minimum. … New Home Sales …
31st January 2019
House prices are on track to grow by 5% in 2018, down marginally from a rise of 6.3% in 2017. That gradual easing in price growth will continue, as housing demand flat lines on the back of a slowing economy. We expect a rise of around 2% this year, which …
29th January 2019
Households struggling to pay their mortgage thanks to the government shutdown will be offered forbearance. That won’t prevent a rise in the mortgage delinquency rate, but with back pay guaranteed it will keep any rise in foreclosures to a minimum. … …
25th January 2019
Annual house price growth was unchanged at 5.8% in November, but it is likely to resume its downward trend in 2019. While mortgage interest rates are set to fall back, a slowing economy will weigh on housing demand, and house price growth will slow to …
23rd January 2019
Strong mortgage demand over the past couple of weeks indicates that the sharp fall in existing home sales in December will soon be reversed. But a slowing economy, weakening house price expectations and lack of inventory all suggest home sales will …
22nd January 2019
The acceleration in earnings growth to close to a 10-year high in December will not boost rental growth. While stronger earnings will support rental demand, the large number of new apartments being completed means vacancy rates will not fall. In any …
17th January 2019
Our forecast for a rise in house prices of 2% in 2019 is close to the bottom of consensus. That view is supported by evidence that housing market conditions have loosened, and that the size of mortgage applications for home purchase have started to …
15th January 2019
Our forecast for a steady decline in mortgage rates over 2019, to 4.3% by the end of the year, is significantly below consensus. But, despite that, we have below-consensus calls for home sales and house price growth. A slowing economy will hit homebuyer …
10th January 2019
Mortgage interest rates saw further declines in December, and look set to drop back to 4.5% over the next few weeks. However, a spike in mortgage applications for home purchase in the first half of December was quickly reversed. That demonstrates lower …
8th January 2019
The drop in mortgage applications in December, even as interest rates saw further falls, supports our view that lower financing costs will not be enough to boost housing market activity in 2019. A slowing economy and moderation in house price expectations …
3rd January 2019
If it continues, the partial Federal shutdown is likely to lead to a decline in the mortgage closing rate. But lenders showed flexibility to get around the virtual closure of the FHA and IRS during the 2013 shutdown, and we expect they will do the same …
21st December 2018
The drop in 10-year Treasury yields seen in recent weeks has led to lower mortgage interest rates. We now think the 5.17% the 30-year fixed rate reached in November represents the peak of the current cycle. Rates are likely to drop back to 4.3% by …
Existing home sales rose for the second consecutive month in November, and a recovery in mortgage demand over the past month suggests they will see further gains over the turn of the year. But with house price expectations easing, the economy set to slow …
19th December 2018
Single-family housing starts dropped to an 18-month low in November, but we expect a modest rise in starts over the next couple of years. Builders have scaled back production in response to slowing new home demand. But the rise in mortgage applications …
18th December 2018
We expect home sales will end 2020 only slightly higher than they are today. Admittedly, the drop in mortgage interest rates seen over the past few weeks has given a boost to mortgage applications. And rates are set to fall further in 2019. But that won’t …
12th December 2018
A drop in mortgage interest rates in November led to a welcome boost in mortgage demand, which has risen to a five-month high. That should provide some support to home sales over the next month or two. New home sales dropped to a 2½-year low in October, …
10th December 2018
On past form the jump in the months’ supply of new homes to an eight-year high would be consistent with outright falls in national house prices. However, the existing home inventory is not far off record lows. Without large numbers of existing homeowners …
6th December 2018
The drop in the 10-year Treasury yield over the past month has brought down mortgage interest rates. In turn, mortgage applications for home purchase have risen to close to a five-month high. Mortgage rates are likely to fall below 5% over the next couple …
5th December 2018
Home sales are set to tread water over the next couple of years, which is good news for the rental sector. If Americans aren’t buying homes, many will look to rent one instead. Admittedly, the upcoming economic slowdown will weigh on household formation. …
3rd December 2018
Even after a significant upward revision to September’s estimate, the 8.9% m/m drop in new home sales in October was enough to send sales to a 2½-year low. But a drop in mortgage interest rates over the past couple of weeks, and a corresponding jump in …
28th November 2018
With higher mortgage interest rates weighing on housing demand, it is not a surprise that the FHFA and Case-Shiller reported slower annual house price growth in September. We doubt mortgage rates have much further to rise but, with the economy set to slow …
27th November 2018
The first rise in existing home sales for six months in October provided a rare piece of good housing market news. That doesn’t signal the end of the slowdown, but it does indicate that the strong labour market is supporting housing demand, and that a …
21st November 2018
Single-family housing starts dropped for the second month in a row in October, and building permits saw their first annual decline in 4½ years. Faltering new home demand has hit homebuilder confidence. But housing demand is not collapsing and, with …
20th November 2018
Amazon’s decision to base its new, secondary HQs in New York City and Northern Virginia does not mean that rental markets in these cities will enjoy the kind of surge seen in Seattle. At the margins, however, even a modest boost to demand from Amazon’s …
15th November 2018
Amongst all the housing market gloom it is easy to overlook the fact that homes are selling quickly, prospective buyer traffic volumes are high and mortgage lenders are approving a high share of mortgage applications. None of that means that home sales …
13th November 2018
Unlike some, we do not think that the latest rise in homeownership among the under 35s heralds an imminent revival in housing market activity. In fact, it tells us more about the previous strength of the market than current or future conditions. Indeed, …
9th November 2018
The 30-year mortgage rate rose above 5% for the first time in over seven years in October, helping to explain why home purchase mortgage demand fell to a two-year low in October. If we are right in thinking that mortgage rates will peak in the next few …
7th November 2018
New and existing home sales fell again in September, as higher mortgage interest rates weighed on demand. But those homes that are selling are doing so quickly, and the strong labour market argues against a severe crash in activity. Indeed, measures of …
6th November 2018
Rising interest rates, declining house price expectations and cuts to the tax advantages of owning a home have all weighed on housing demand since the turn of the year. Of these, the drop in house price expectations appears to be the main driver, followed …
1st November 2018
After rising for eight consecutive quarters, the homeownership rate was unchanged in the third quarter. A lack of homes for sale, and higher interest rates weighing on home demand, help explain why the recovery in homeownership has stalled. But household …
30th October 2018
The apparent rebound in house price pressures, implied by the 0.6% m/m rise in August, reflects issues with the seasonal-adjustment process, rather than a sign that the slowdown in house price growth has come to an end. With higher interest rates weighing …
Rising interest rates have led to an increase in the share of mortgages originated with an adjustable rate (ARMs). But the market share is still small, and the products have not been targeted at riskier borrowers. Moreover, with nearly all ARMs having an …
25th October 2018
New home sales dropped for the fourth month in a row in September, as rising mortgage interest rates have weighed on housing demand. House price growth has also continued to ease, with the 6.1% y/y rise in August the slowest pace recorded in 20 months. …
24th October 2018
The housing market slowdown continued in September, with existing home sales seeing the largest month-on-month drop since early 2016. Sales are likely to stay weak, but with the labour market still performing strongly, we doubt that the recent easing in …
19th October 2018
A sharp drop in the share of homes seeing an increase in value over the past year is ringing alarm bells in some quarters. But the fact that housing demand is flat lining, rather than contracting and supply is tight both suggest that a soft landing is …
18th October 2018
The headline drop in housing starts in September was mainly driven by the volatile multifamily sector, but single-family starts also edged down. Looking forward, the good news is that lumber prices have now fallen back from their recent spike. The bad …
17th October 2018
Mortgage interest rates have continued to trend higher, and look poised to breach 5% for the first time since early 2011 in October. Alongside mortgage lending standards which are still tight, that has weighed on home sales. House price growth is also …
10th October 2018
Since the end of August, the 30-year fixed mortgage interest rate has risen by 16bps, to stand at 4.96% in the final week of September. Given that, the corresponding 0.9% m/m rise in mortgage applications may seem a little surprising. But with rates set …
3rd October 2018
Households electing not to move to avoid giving up a record low, fixed mortgage rate provide one potential explanation for the slowdown in home sales in recent months. However, the available evidence does not suggest that rate lock-in is a major …
1st October 2018
Housing market activity has experienced a marked slowdown since the start of the year, with mortgage applications, home sales, housing starts and house prices all losing momentum. Higher mortgage interest rates look to be the primary cause, although a …
28th September 2018
New home sales rose by 3.5% m/m in August. But given the volatile nature of the series, and a downward revision to July’s reading, the overall picture is one of flat sales since the end of last year. Relatively healthy inventory levels, and the fact that …
26th September 2018
The FHFA and Case-Shiller both reported a small rise in house prices of 0.2% m/m in July. That continues the run of weaker house price gains seen since the spring. Higher mortgage interest rates are weighing on housing demand and dampening price …
25th September 2018
The downward trend in existing homes sales seen since April came to a halt in August, with sales unchanged over the month. But that still left sales at 2½-year lows. With interest rates set to rise further, and inventory not far off record lows, the …
20th September 2018
The headline 9.2% m/m rise in housing starts in August hides an otherwise disappointing report. The jump in starts was driven by the volatile multifamily sector, with single-family construction seeing only a marginal gain. Moreover, single-family building …
19th September 2018
Experience from Hurricanes Harvey and Irma last year suggests the share of delinquent mortgages in the Carolinas, Virginia and Georgia will rise following Hurricane Florence. However, with the negative equity share in all four states close to or below the …
14th September 2018
Housing market activity has slowed since the start of the year, as rising interest rates and record low affordable inventory has weighed on home buying sentiment. With interest rates set to rise further, and not much chance of an improvement in the supply …
12th September 2018
Mortgage interest rates, credit standards and buyer sentiment have all been stable over the past couple of months. But both mortgage applications for home purchase and home sales have seen further declines, and July single-family housing starts failed to …
10th September 2018
The gradual contraction in mortgage demand continued in August, with applications for both refinancing and home purchase loans seeing month-on-month falls. To date, the drop in home purchase demand has been relatively modest. But that may reflect a …
5th September 2018
According to the Case-Shiller index, house price growth continued to slow in June. The rise of 6.2% y/y was the smallest annual gain since November 2017. The recent moderation in mortgage applications for home purchase suggests growth will slow further …
28th August 2018
