US Housing Outlook: 10 Facts

by Torsten Slok, Chief Economist Apollo

There are 10 conclusions:

PS Germain's take: If you cant buy a house, then you rent an apartment!

1. High mortgage rates at 6.7% combined with a median home price of $400,000 are holding down traffic of prospective homebuyers, see the first chart.

2. 75% of US households can only afford a home priced below $300,000, well under the current median sales price, see the second chart.

3. The share of first-time homebuyers is at the lowest level in decades, and the median first-time buyer is now 40 years old, up from 30 in 2008, see the third chart.

4. Nobody is moving. The structural decline in the share of the US population changing address continues, and the share of households planning to move over the next 12 months has fallen to a record low of approximately 7%, see the fourth chart.

5. Household formation has slowed sharply as immigration has declined, removing a key source of underlying housing demand, see the fifth chart.

6. The typical American home is now 42 years old, and we are not building fast enough to replace the aging stock, see the sixth chart.

7. US homes are getting smaller, with the median size of new single-family homes declining over the past decade as builders chase the price points buyers can still reach, see the seventh chart.

8. House price inflation has stalled near 1% overall, but it is turning higher again for the most expensive homes, where buyers are least dependent on mortgage financing, see the eighth chart.

9. Households' equity in real estate totals $35 trillion, an average of roughly $400,000 per owner-occupied home, see the ninth chart.

10. Delinquency rates on multifamily housing have climbed above their post-GFC peak to the highest level since at least 2004, see the tenth chart.