US Home Prices Bottom Near Record Highs
US home prices have bottomed. At record highs.
I'm just joking. But not entirely.
Both Case-Shiller home price indexes posted solid monthly gains for March, data released on Tuesday showed. The national index rose 0.42% from the prior month and the 20-city gauge 0.45%, in what S&P Dow Jones's Craig Lazzara suggested might've signaled the end of a nine-month swoon for the housing market.
On a YoY basis, the 20-city index fell 1.1%, less than the 1.6% drop consensus expected.
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The population is barely growing so who’s fueling the demand for buying or renting? What are they leaving behind? Who’s going to buy that stuff? I’m not a NAR staff economist but somehow the math doesn’t seem to work.
In Canada 99% of mortgage terms are 5 years or less. A few years ago they put a stress test in place whereby people had to qualify for their mortgage (acceptable debt service level) at a rate 2% higher than the current 5 year rate, those mortgages will start coming due in the not to distant futue (of course prices have gone up so most people can sell vs default). In addition, the banks have already done a lot of work extending the amortization period for homeowners whose payments on floating rate mortgages no longer covered the interet at the higher rates. Will be interesting to see if those 2 factors have any influence on the markets going forward.
I don’t think it’s about current population growth but is about the homebuying demographics. It is huge. Couple that with Baby boomers not being able/ wanting to sell their home for many reasons and new construction catering to move up buyers and not first time buyers.