US Housing Outlook: Recovery Continues

Apollo Chief Economist

Ten reasons to be bullish on US housing:

1) Household formation is 2.3 million below its long-run trend, i.e., there is pent-up demand for 2.3 million homes in the US, see the first chart.

2) The share of homes without a mortgage is rising, and now at about 40%, see the second chart.

3) 30% of homes are selling above their list price, see the third chart.

4) The inventory of homes for sale remains very low, see the fourth chart.

5) The share of people planning to move to a new address has started to increase, see the fifth chart.

6) The share of homes built for rent is going up, see the sixth chart.

7) Employment in construction is rebounding, see the seventh chart.

8) The number of new foreclosures remains very low, see the eighth chart.

9) About half of mortgages have an interest rate below 4%, see the ninth chart.

10) After the Fed pivot in November 2023, asking rents have started to increase, see the tenth chart.

Our updated US housing chart book is available here.

US has an estimated deficit of 2.3mn homes
Source: Census, Haver Analytics, Apollo Chief Economist
Almost 40% of US homes don’t have a mortgage
Source: US Census Bureau, Bloomberg, Apollo Chief Economist
Despite high mortgage rates, 30% of homes selling above their list price
Source: Redfin, Apollo Chief Economist
Total housing inventory per person very low
Source: Census Bureau, FRED, Apollo Chief Economist
Share of households planning to move starting to recover
Source: FRB of NY, Haver Analytics, Apollo Chief Economist
Share of homes built for rent going up
Source: Census Bureau, Haver Analytics, Apollo Chief Economist
Employment in residential construction rebounding
Source: BLS, Haver Analytics, Apollo Chief Economist
New foreclosures, by age of homeowner
Source: FRBNY Consumer Credit Panel, Equifax, Haver Analytics, Apollo Chief Economist
About half of all mortgages outstanding have an interest rate below 4%
Source: FHFA, Apollo Chief Economist
Asking rents rising across regions
Source: Rent.com, Apollo Chief Economist

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