Filtered by Subscriptions: US Housing Use setting US Housing
Higher mortgage rates and lean inventory hit housing demand The mortgage market came off the boil in February, with home purchase applications recording their largest month-on-month decline since the height of the pandemic last April. A rise in mortgage …
3rd March 2021
Record high lumber prices are leading to delays in housing starts, and as result the share of homes for sale that have not been started reached a record high in January. While that will constrain single-family starts in the short term, sales of homes that …
26th February 2021
New home sales rise, but slowdown on the horizon New home sales rose for the second consecutive month in January to 923,000 annualised. But rising mortgage interest rates and tight inventory point to a slowdown over 2021. Indeed, mortgage applications for …
24th February 2021
Rising mortgage rates to weigh on house prices The house price boom continued in December, with month-on-month gains exceeding 1.0% on the FHFA measure for the seventh consecutive month. However, rising mortgage interest rates will weigh on affordability, …
23rd February 2021
Home sales continue to surprise on the upside Existing home sales managed to eke out a small gain in January, even as inventory fell to new record lows. But the lack of supply means activity will fall back to earth later in 2021, reinforced by rising …
19th February 2021
Housing starts fall as construction constraints weigh heavy January’s 12.2% m/m decline in single-family housing starts reversed the solid gains seen in December. Record low inventory is supporting homebuilder confidence, and that points to a decent year …
18th February 2021
An elevated unemployment rate, alongside some relaxation in immigration restrictions, will help ease labour shortages in the residential sector this year. Admittedly, not all parts of the economy are finding jobs easy to fill, but homebuilders are …
17th February 2021
Mortgage rates rose to a 12-week high in the first week February, and a further rise in the 10-year Treasury yield to 1.5% means they will increase to around 3.2% by the end of the year. Alongside surging house prices and record low inventory, that …
12th February 2021
As it is based on asking prices, the recently launched Common Haus Price Index (CHPI) could lead other house price indices by 1-2 months, which would make it a useful tool for forecasting short-term changes in house prices. While its track record is far …
8th February 2021
In our Future of Property research, we identified important post-pandemic shifts in most real estate sectors. How these trends interact will be key to the outlook for the urban locations where most real estate is clustered. We think it is premature to …
4th February 2021
An improvement in the share of in-person interviews in the fourth quarter HVS survey helped bring the homeownership rate back down from its recent implausible highs. And, with home sales set to slow this year, we expect it will stay close to 65.5% over …
Threat of higher interest rates drives up mortgage demand The threat of higher interest rates drove mortgage demand higher in January, with refinancing activity seeing a particularly large gain. A narrowing spread means we expect the upcoming rise in …
3rd February 2021
New home sales lose momentum The small gain in new home sales in December continues the run of falling or weak sales seen since August of last year. That moderation in sales is set to persist in 2021, as worsening affordability, the exhaustion of pent-up …
28th January 2021
We estimate a backlog of around 850,000 foreclosures will have built-up if the ban is extended until the end of September, similar to the peak seen during the financial crisis. However, not all those foreclosures will be processed in the final quarter of …
27th January 2021
House price growth surges to record high House price growth continued to surge in November, with both Case-Shiller and FHFA reporting strong gains. At 11% y/y, the rise in the FHFA index is the highest since records began in 1992. But the current boom in …
26th January 2021
Surprise rise in home sales Existing home sales recorded a marginal gain in December but are set to fall back over 2021. Mortgage rates will not decline any further and rising house prices have already reversed the boost to affordability they provided. …
22nd January 2021
With risk-free interest rates not set to drop any further, and home sales constrained by record low inventory, the cost of the prepayment option on MBS will have fallen. Alongside Fed purchases of MBS, that helps explain the recent narrowing in the spread …
21st January 2021
Permit gains point to a strong start of the year for homebuilders Single-family starts rebounded in December, recording their largest month-on-month gain since June. While production constraints will continue to weigh on starts, we are relatively upbeat …
House price growth surged to 8.4% y/y in October, as booming home sales have combined with record low inventory to boost values. But that rise in prices has already offset the improvement to affordability provided by record low mortgage rates. (See Chart …
15th January 2021
Compared to consensus, we are relatively downbeat on the outlook for home sales this year. Mortgage rates will stay close to record lows, but they will not fall further. Pent-up demand from last spring will soon be exhausted, inventory is at record lows …
7th January 2021
Home purchase demand starts to drop back Even as mortgage rates stayed close to record lows, applications for home purchase declined in each of the last three weeks of December. With interest rates not set to fall further and the boost to affordability …
6th January 2021
The pandemic – and the associated increase in working from home – may cause a fundamental shift in the way that cities function in future. But this shift will not necessarily trigger a more fundamental economic decline in the world’s largest urban …
5th January 2021
House price boom continues, for now Record low mortgage rates, surging home sales and tight inventory pushed annual house price growth to a 6½-year high in October, but we doubt the boom in prices will last for long. The past gain in prices has already …
29th December 2020
Overview – The housing market boomed in the latter half of 2020, as record low mortgage rates, displacement due to COVID-19 and increased savings boosted home demand. But those drivers will ease in 2021 and, alongside worsening affordability and record …
23rd December 2020
New home sales constrained by tight inventory New home sales fell 11.0% m/m in November, driven by a lack of inventory and pent-up demand from earlier in the year coming to an end. But easing demand is yet to feed through to house price growth, which …
Sales fall as inventory constraints bite Existing home sales fell for the first time in five months in November, as record low inventory and the exhaustion of pent-up demand from the spring put a dampener on activity. Record low mortgage rates have …
22nd December 2020
Supply constraints weigh on housing starts Single-family starts rose for the seventh consecutive month in November, but at a slower pace. And with production constraints starting to weigh on homebuilder confidence, we think that gains will slow further …
17th December 2020
As the country begins to return normal next year, the hardest hit apartment markets in the country will recover. New York City looks particularly well-placed to benefit from returning non-office-based workers. Combined with aggressive rent cuts, which …
16th December 2020
The surge in home sales looks to be running out of steam. The pending home sales index dropped back in September and October, and that points to a fall in existing home sales in November. (See Chart 1.) With pent-up demand from the spring now largely …
9th December 2020
An important driver of the surge in home sales over recent months has been households leaving apartments in cities to escape COVID-19 and acquire more space to work from home. But a fall in the share of single-family and completed new homes in total home …
7th December 2020
News about a vaccine has boosted financial markets and we have revised up our global economic expectations for the next two years or so. But while we think that this bodes well for the medium term, next year is still likely to be tough for most property …
2nd December 2020
Thanksgiving holiday skews purchase applications higher Issues with seasonal adjustment over the Thanksgiving holiday, when many more people stayed home and perhaps applied for a mortgage, led to a spike in home purchase mortgage applications in the final …
Low inventory weighs on home sales New home sales levelled off in October, suggesting that pent-up demand from the spring is running out. In addition, strong sales over the summer months have left the supply of homes for sale at an all-time low, making it …
25th November 2020
House price boom should prove short-lived House price growth is quickly entering boom territory, with both Case-Shiller and FHFA reporting a surge in annual gains in September. At 9.1% y/y, the rise on the FHFA index is the highest in almost 15 years. But …
24th November 2020
Sales surprise on the upside, pushing inventory to another record low Existing home sales surprised on the upside in October, rising to a 15-year high. However, even with mortgage rates set to stay low, we expect sales will see some retrenchment over the …
19th November 2020
A striking development in the past few months is how well housing markets in developed markets have generally been doing. We expect this to peter out next year, although in most cases house price falls will be avoided. In the meantime, the strength of …
Virus-driven behaviour changes that support a faster online transition will boost industrial demand over the coming years. But we don’t believe the view that higher online spending will cause rents to detach permanently from the underlying strength of the …
Rising rental vacancy rates in large cities have not been accompanied by a surge in first-time buyers (FTBs). Indeed, 2020 saw the lowest share of FTBs since 1987. That implies many of those rental households who left large cities are either renting in …
18th November 2020
Surge in homebuilder confidence points to further rise in starts Single-family starts had another strong month in October, and are now up 75% compared to their trough in April. Record low inventory is supporting homebuilder confidence, and that points to …
The 30-year mortgage rate fell below 3% last week, but we doubt it will stay there for long. A rise in 10-year Treasury yields means mortgage rates will soon tick-up. That will weigh on housing demand, which had already been losing steam. Indeed, mortgage …
12th November 2020
Recovery in mortgage applications likely a false dawn Mortgage applications recovered some ground in October, as an upturn in refinancing offset a fall in home purchase demand. But the underlying trend is broadly flat since June and we don’t expect any …
4th November 2020
Wealthy buyers seeking homes during the pandemic have driven the share of existing homes sold for over $500,000 to a record high. A lack of inventory has prevented a similar rise in the new home sector, and that may persuade builders to refocus on …
2nd November 2020
Despite issues with sampling due to COVID-19, the third quarter HVS survey did provide some interesting information on the impact of the virus. A surge in median asking rents was caused by a jump in the share of expensive multifamily units on the market, …
28th October 2020
House price growth gathers steam on back of strong demand House prices had another strong month in August, with annual growth on the FHFA measure surging to 8.1%, a 14-year high. Record low mortgage rates have given a boost to housing demand, and record …
27th October 2020
New home sales drop back for first time since April New home sales dropped back in September, the first contraction since the height of the pandemic in April. Pent-up demand from the spring is now dissipating and tight inventory, particularly of completed …
26th October 2020
Despite a surge in mortgage applications, holdings of residential loans by commercial banks declined in August and September. We suspect that divergence is due to a rise in mortgage repayments, which would be in line with the jump in the saving rate. In …
22nd October 2020
Current pace of sales growth cannot be sustained Existing home sales had another strong month in September, and month-on-month growth has now averaged 14% since June. But with housing demand easing back, and inventory getting ever tighter, that pace of …
Single-family starts see further gains on back of strong new home demand Single-family starts and building permits had another strong month in September, as builders increased production on the back of buoyant demand and dwindling inventory. A moderation …
20th October 2020
Overview – Record low mortgage rates, pent-up demand from the spring and some movement out of cities have helped drive home sales to 13-year highs. But with inventory falling to record lows, mortgage lending standards tightening and unemployment elevated, …
16th October 2020
Record low mortgage rates have continued to support home sales, with the pending homes sales index reaching its highest level since the series began in 2001. (See Chart 1.) But a rise in the 10-year Treasury yield implies mortgage rates will now tick-up. …
9th October 2020
