Filtered by Subscriptions: US Housing Use setting US Housing
The single-family rental market has been on a roll since the GFC and the pandemic provided a further boost. Nonetheless, while it may hold up slightly better than multifamily over the next year or so, affordability pressures mean that current rental …
8th December 2022
Housing demand rises for first time since March A fall in mortgage rates from recent 20-year highs helped home purchase applications rise for the first time in eight months in November. However, while we expect mortgage rates to continue to trend lower …
7th December 2022
Our forecast for a drop in house prices means renting looks a better option than buying for any holding period under 10 years. While this will encourage some potential buyers to rent instead, we doubt it will provide much support to the rental market …
2nd December 2022
Third consecutive month of falling prices, and counting A deterioration in affordability helped the Case-Shiller house price index to fall for the third consecutive month in September. The FHFA reported a small rise in prices, but we think more falls are …
29th November 2022
Banks are likely to tighten credit conditions over the next year to protect themselves from house price falls. But their more cautious approach to lending in this cycle means we don’t think they will have to tighten conditions as significantly as in …
23rd November 2022
Sales level off, but leading indicators point to declines New home sales have levelled off in recent months, but leading indicators support our view that sales will fall a little further by the end of the year. Looking ahead, we expect stretched …
Rising mortgage rates cut sales A renewed rise in mortgage rates led to the largest month-on-month decline in existing home sales since February. As the impact of higher rates continues to feed through in the coming months, we expect sales to fall further …
18th November 2022
Weak builder confidence points to further declines in starts Single-family starts fell to 855,000 annualised in October which was much stronger than what was implied by the low level of homebuilder confidence. We expect further declines in new home sales …
17th November 2022
The small increase in vacancy in Q3 supports our view that the rental market is turning a corner and makes us increasingly confident in our call that rents will fall next year. Conditions remain tighter in the homeowner market. But higher interest rates …
16th November 2022
Overview – We expect mortgage rates will hold close to 7% over the remainder of the year, leaving affordability at its worst since 1985. That will lead to another sharp fall in activity. As the economy dips into a mild recession in 2023, sales and …
8th November 2022
Mortgage applications point to further falls in sales On the back of a rise in mortgage rates to above 7%, home purchase applications took another step down in October. That points to further declines in home sales in the coming months. With mortgage …
2nd November 2022
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 …
31st October 2022
Leading indicators suggest sales have further to fall The 10.9% m/m fall in new home sales in September partly reversed last month’s surprise jump. But they are still out of lockstep with both buyer traffic and mortgage applications. Those indicators …
26th October 2022
House price falls gain momentum Both Case-Shiller and the FHFA reported an acceleration in month-on-month house price falls in August. With mortgage rates rising to a 20-year high in October and the economy set to enter a recession, we expect house …
25th October 2022
Relentless fall in sales continues The 1.5% m/m fall in existing home sales in September showed that rising mortgage rates continued to weigh on housing market activity. Given the recent step-down in mortgage applications as mortgage rates approached …
20th October 2022
Housing starts back on a downward trajectory September’s decline in starts supports our view that last month’s increase was a one-off and starts will fall further in the coming months. We expect the rise in mortgage rates to near 7% to continue to weigh …
19th October 2022
A deterioration in the economic outlook and renewed rise in mortgage rates to a 16-year high in September means the housing market is set for a further slowdown. We estimate that mortgage payments as a share of median income rose to 26% in September. …
14th October 2022
Central banks have the tools to deal with liquidity crises arising from rising interest rates and falling asset prices. Instead, the bigger threat is that higher interest rates produce large and simultaneous falls in asset prices that threaten the …
11th October 2022
Against a backdrop of higher mortgage rates, a weaker economy and prices falling earlier than expected, we have cut our forecast and now expect a peak-to-trough fall in house prices of 8%, down from our previous view that prices would drop by 5%. That …
6th October 2022
Demand falls as mortgage rates hit 16-year high The sixth consecutive month of falling home purchase activity in September was driven by a sharp rise in mortgage rates to 6.75% at the end of the month. With a significant easing in credit conditions not …
5th October 2022
An upward revision to our 10-year Treasury yield forecast and a widening in spreads have led us to upgrade our mortgage rate forecasts. We now expect the 30-year fixed rate will stay close to 6.5% for the remainder of the year before falling to 5% by …
4th October 2022
House prices fall in July, with more to come The fall in prices reported by the FHFA in July supports our view of a sustained decline over the next 12 months. With mortgage rates rising to above 6% in September, we think it is only a matter of time …
27th September 2022
Existing sales have further to fall We doubt the smaller 0.4% m/m fall in existing home sales in August marks a floor for activity. Indeed, it is line with the levelling off in mortgage demand seen in July as the rise in mortgage rates took a brief …
21st September 2022
Starts rise in August, but further falls seem likely Housing starts surprised on the upside in August, rising for the first time in six months. But we still expect them to fall further this year as stretched affordability continues to weigh on new home …
20th September 2022
We expect a sharp slowdown in apartment rental growth across the board, as job growth slows, affordability constraints bite and an influx of supply pushes up vacancy. But some markets will perform better than others. Rent prospects are strongest in the …
16th September 2022
Stretched affordability continued to weigh on housing market activity in July and August, leaving mortgage applications for home purchase down by 40% from their high in January. A renewed rise in mortgage rates to above their previous peak of 6% in the …
9th September 2022
Renewed rise in mortgage rates points to further falls in demand Home purchase applications fell for a fifth consecutive month in August, leaving them down by 40% from their high in January. With mortgage rates once again rising and against a backdrop of …
7th September 2022
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
