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Main article: US economy
2024
Housing sales decline to 2012 level
The U.S. housing market experienced its worst spring sales season since 2012.
Crisis in the secondary real estate market. Sales at historic lows
In April 2024, the US real estate market is in a crushed state.
This is especially true for the secondary market, where sales fell to 4.14 million houses in annual terms throughout the United States - this is comparable to average sales in 2008-2011, when the real estate market was experiencing the worst crisis in 80 years.
Current sales in the secondary market are 25% lower than in 2018-2019 and 35% lower than from 2Q20 to 4Q21, when the real estate market in the United States was "seething."
Adjusted for population growth, sales are a third lower than they were at the beginning of the 2000s, 54% lower than at the peak of the mortgage bubble 2006-2007 and at a historical minimum, breaking the bottom of the crisis 2008-2011 and 45% lower than in 2020-2021. Everything is very bad, Spydell Finance wrote.
Expected home sales (the contract has been signed, but the deal has not yet been closed) collapsed by a historic minimum - about 15% lower than in the 2008-2009 crisis, a third lower than in 2018-2019 and almost 40% lower than in 2020-2021.
Adjusted for the population, the real defeat is almost 25% lower than in the crisis 2008-2009 and 40% lower than in the early 2000s.
Resumption of price increases. Rich people buy real estate, there is a shortage on the market
US property prices continue to rise by April 2024, updating the all-time high every month.
According to Zillow, the average house costs almost $360 thousand, before tightening the monetary policy in March 22, the peak of prices was at the level of $350 thousand, until the beginning of 2023 prices fell and from February 23 went into continuous growth.
Real estate prices increased by 43-45% compared to 2019, which is the fastest increase since the 2006 real estate bubble. Relative to 2012, prices doubled.
Taking into account inflation, prices in 2024 correspond to the level of 2006-2007. Then the crisis led to a 5-year decline in prices, but this time they do not fall.
The two main reasons are:
- ETF funds buy real estate in whole quarters, as do wealthy individuals.
- The supply limitation after many years of stagnation in the construction market, when the pace of commissioning of new housing in 2008-2019 was almost half as much as in 1990-2007, is affected.
Median price of new US home drops from $496,800 to $400,500
The median price of a new home sold in the United States by March 25, 2024 decreased by 19% compared to the peak reached in October 2022 (from $496,800 to $400,500).
After the peak of the last housing bubble, the median price of a new home fell 22% nationally.
2023
Rising prices to a record average of $350 thousand per object with minimal sales over 40 years in the secondary market due to a decline in construction for 15 years
The crisis in the real estate market in the United States is growing - sales in the secondary real estate market reach a minimum in 40 years and an absolute minimum per population.
As of September 2023, 3.79 million houses were sold in annual terms - at least since 2010, when tax breaks were canceled, which is 35-40% lower than average sales from 3q20 to 4q21 and 30% less than sales from 2017 to 2019.
If you adjust sales per capita, the current activity in the secondary real estate market is 55% lower than the maximum in 2005-2006 and is the minimum for the entire period of statistics.
The start of construction of new houses/primary real estate is 25% lower than the volume of construction at its peak in 2021 and 35% lower than the pre-crisis high in 2006, although it is still 15% higher than the averages of 2017-2019 due to the sufficiently low supply volume in the market, which smooths out the effect of the crisis.
According to Zillow (the most efficient indicator of real estate prices), the value of real estate has been growing for the seventh month in a row, which made it possible to compensate for the fall in prices in the second half of 2022 and enter a positive annual trend (+ 1.8% YoY).
The weighted average price of a residential real estate object is almost 350 thousand dollars (historical maximum), which is 40-42% higher than the level that was before the COVID-19 crisis.
The situation is absurd - prices rise with a drop in sales, which is associated with inflationary processes (real estate, as the possibility of maintaining impairment savings), a shift in demand for expensive real estate (increases the average price indicator) due to the activity of wealthy buyers and a fairly low supply volume (accumulated effect of low construction volume of the last 15 years).
According to the 15-year total of construction of new houses, the level in 2023 is a third lower than in 2005, 23% lower than the minimum construction rate 50 years before the mortgage crisis (in 1993-1994) and 35% lower than the peak of the boom in the real estate market in 1986.
Per 1,000 people, 48 houses were built in 15 years, which is 40% lower than 2005 and 2.3 times lower than in the early 1980s.
Taking into account inflation, current prices are only 2-3% higher than the bubble maximum in 2006, and 68% higher at par.
With a real estate value of $350 thousand, a 20% contribution and a 30-year mortgage loan at 7.8% - the average monthly loan payment of $2 thousand excluding taxes and insurance, and in 2019 with a real estate value of $245 thousand and rates of 3.6% - the payment was $890.
By September 2023, high mortgage rates and high prices had pushed U.S. housing affordability to a decades-low record.
The housing affordability situation in the US is worse than at the peak of the last housing bubble. The average American household will have to spend 43.8% of its income to afford a median-priced home, a record high.
Monthly mortgage payments for typical U.S. homes cost more than rent.
6.3% of housing is available for rent
Rising property prices at the beginning of the year
2022
US home sales fall to near COVID-19 pandemic
The market valuation of residential real estate in the United States over 10 years has grown 2.3 times from 20 to 46 trillion dollars
After the madness during the COVID-19 epidemic, which launched monetary and fiscal doping on an unlimited scale, residential real estate prices increased by 30% in 2 years (according to the Fed), which was the strongest growth since 2005 and 1985.
In monetary terms, an increase of $12 trillion for 2 years from Q2 2020 to Q2 2022. Various agencies give a range of rising property prices of 30% to 40%.
For example, according to the Federal Housing Finance Agency (FHFA), real estate prices rose 41% from April 2020 to June 2022.
The S & P/Case-Shiller Home Price Index estimates price increases of 36% to 37% for the national index over a comparable period.
Census calculates an increase of 35-36% on average over two years (the average and median estimates of house prices differ, as does the spread across regions and house types).
In any case, we are talking about the strongest price increase, at least since 2004-2006, reaching the peaks of the early 1980s, the Spydell Finance channel noted.
Since July 2022, a trend reversal has been recorded, where a powerful and long-term downward trend is emerging. Again, various agencies give a wide range of correctional movement, but in this case, it is not nuances that are important, but the general direction.
From June-August 2022, depending on how to count, the trend has unfolded - a fact. The pace of price decline is the highest since 2007-2008 - also an indisputable fact.
Falling property prices almost always lead to related problems.
The ratio of real estate value to family income in different cities
Sharp decline in sales of secondary real estate
2021
Growth in residential real estate construction
Rapid rise in rental property prices
Rental costs are skyrocketing in U.S. cities, squeezing the finances of low-income families and raising doubts that pandemic inflation will soon disappear.
According to the Apartment List, in the first half of 2021, the median rent in the country increased by 9.2%.
In the 12 months to April, house prices posted record growth in more than 30 years.
13.9% of 25 to 34-year-olds live with their parents
2020: 10.4% rise in property prices
2019: Map of the number of skyscrapers in individual states
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