Erdmann Housing Tracker

Erdmann Housing Tracker explores the multifaceted reasons behind escalating housing costs, including the impacts of urban regulation, economic models, homeownership trends, and monetary policy. The Substack provides data-driven analyses on inflation, housing supply shortages, regulatory effects, and proposes solutions for improving housing affordability and stability.

Housing Market Trends Urban Planning and Regulation Economic Policy and Inflation Homeownership and Renting Dynamics Monetary Policy Supply and Demand in Housing Global Financial Crisis Demographic Impacts on Housing Construction and Housing Supply Gentrification and Displacement Affordable Housing Strategies

The hottest Substack posts of Erdmann Housing Tracker

And their main takeaways

The Tea Party, Occupy Wall Street and the Bi-partisan American Own-Goal

42 implied HN points • 20 Mar 23
  1. Zoning laws played a significant role in the economic interventions post-recession and led to movements like the Tea Party and Occupy Wall Street.
  2. The tightening of mortgage regulation after the housing bubble collapse disproportionately affected poor communities.
  3. The lack of proper mortgage access due to misguided policies led to a collapse in housing production and a rise in rents, impacting working-class Americans negatively.

September 2023 Residential Construction

21 implied HN points • 18 Oct 23
  1. The monthly residential construction update confirmed expectations.
  2. Homebuilder stocks took a hit despite the confirmation of expectations.
  3. Consider subscribing for more detailed insights and analysis.

Op-Ed in the Arizona Republic

42 implied HN points • 14 Feb 23
  1. Cities need flexible zoning to remain affordable and vibrant.
  2. Trying to stop a city from changing by freezing its form is like trying to stop kids from growing without buying them new clothes. It doesn't work.
  3. Kevin Erdmann advocates for adaptable urban planning in his op-ed for the Arizona Republic.

A little secret buried in a homebuilder's SEC filings

42 implied HN points • 06 Feb 23
  1. The post discusses a hidden secret in a homebuilder's SEC filings.
  2. Readers need to subscribe to be able to access this information.
  3. The author gives a disclaimer about not providing financial advice and owning a long position on the stock tip.

August 2023 Residential Sales

21 implied HN points • 27 Sep 23
  1. Sales dropped slightly this month, but it's not a big cause for concern.
  2. Sales of finished units are higher than in recent years, even though sales of unstarted units are relatively low.
  3. The number of finished units for sale remains low, and units tend to sell quickly once they reach that stage.
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August 2023 Residential Construction

21 implied HN points • 19 Sep 23
  1. August 2023 Residential Construction update provides trading opportunities for those interested in housing.
  2. The full post archives are accessible with a subscription that includes a 7-day free trial.
  3. Paid subscribers can sign in to access the complete content.

Hovnanian 3Q 2023 and musings on speculation and mortgage rates

21 implied HN points • 31 Aug 23
  1. Hovnanian had a strong quarter, surprising investors and showing potential for future growth.
  2. Mortgage rates have less impact on home sales and prices than commonly believed, often leading to market misconceptions.
  3. Changes in mortgage rates may influence buyer behavior, but the overall effect on real estate market dynamics is often overstated.

July 2023 CPI Inflation Update

21 implied HN points • 14 Aug 23
  1. Inflation appears to be over, with most categories settling back to a 2% trend.
  2. The debate on transitory inflation raises questions about its nature and triggers.
  3. The theory suggests that a recovery in residential investment is crucial for overall economic growth.

June 2023 New Residential Home Sales

21 implied HN points • 27 Jul 23
  1. June 2023 New Residential Home Sales data is presented on the website
  2. Trends generally continue in the housing market
  3. Details about the trends are available behind a paywall for subscribers

Bubble Mongers are more dangerous than bubbles

21 implied HN points • 11 Jul 23
  1. Bubble mongers can be more harmful than actual bubbles.
  2. Residential investment trends show a different cycle in 2023 compared to the past.
  3. The narrative around bubbles, recessions, and investment behavior in various economic cycles can be misleading and dangerous.

A Review of Gjerstad and Smith, Part 3

21 implied HN points • 04 Jul 23
  1. Bubble models can explain too much and lead to inaccurate predictions.
  2. The collapse of lending markets did not lead to a return to normal housing expenditures post-2008 crisis.
  3. The housing supply problem was worsened by following policy choices based on the bubble model, leading to financial pain for many American families.

A Review of Gjerstad and Smith, Part 1

21 implied HN points • 29 Jun 23
  1. Explanations of complex systems have uncertainties and rely on mental shortcuts.
  2. Interest rates and home prices may have a complex relationship influenced by various factors.
  3. The concept of bubbles in markets can lead to oversimplification and model risks.

Home Price Trends Point to a Worsening Lack of Supply: Part 3

21 implied HN points • 02 Jun 23
  1. Urban supply constraints lead to population decline in cities like New York and Los Angeles
  2. Mortgage access affects home prices more in locations with relatively moderate prices
  3. Tightening mortgage access can cause both price increases and construction recovery in certain markets

More on the Fed, Housing, and Inflation

21 implied HN points • 12 May 23
  1. Inflation has been under control for months, with current 12-month rate around 5%.
  2. Fed's rate hikes may not have been necessary as inflation slowed down before they were implemented.
  3. The Fed's management during Covid has helped improve expectations of economic recovery.

No, Biden isn't punishing you for your high credit score (Amendment)

21 implied HN points • 02 May 23
  1. Loan-level price adjustments were first introduced in 2008 and have evolved since then.
  2. Current fees related to credit scores are remnants from a past financial crisis.
  3. The 2008 crash did not justify increased fees based on credit scores.

A Brief Review of Mortgage Affordability

21 implied HN points • 14 Mar 23
  1. Mortgage affordability has been a hot topic due to rising costs and recent stabilization.
  2. Using income required for a mortgage payment gives insight into housing market trends.
  3. Consider subscribing to Erdmann Housing Tracker for more insights.

Hovnanian 2023 1st Quarter

21 implied HN points • 01 Mar 23
  1. Hovnanian released their 2023 1st Quarter earnings update.
  2. The update contained interesting information about the home builder.
  3. Readers can access the full post archives with a 7-day free trial.

January 2023 Erdmann Housing Tracker Update

21 implied HN points • 21 Feb 23
  1. Data revisions this month impacted trends on income and home price estimates.
  2. New Zillow methodology led to significant changes in home price estimates.
  3. Tentative evidence of a supply expectations-driven price correction in California has decreased.

2022 October New Home Sales & Construction

21 implied HN points • 29 Nov 22
  1. Housing starts are declining due to supply chain issues, resulting in an increase in units under construction but not in output.
  2. Single-family home construction is slowing down, while multi-unit construction is increasing at a faster pace.
  3. The backlog of units under construction is growing, indicating that the housing market is still strong despite expectations of decline.

"Price is the Medium Through Which Housing Filters Up or Down": Part 1

21 implied HN points • 18 Nov 22
  1. Inadequate supply of housing hurts poor families the most.
  2. As housing supply diminishes, the competition for housing increases, affecting families with lower incomes.
  3. Cities with high housing costs often have the highest incomes because lower-income families are forced out.

Quick Review for Funsies

21 implied HN points • 18 Nov 22
  1. High mortgage rates can affect home buying and selling activity
  2. Changes in mortgage rates may not always correlate with net changes in mortgages outstanding
  3. Various factors, like rent inflation and supply, can impact home prices beyond just mortgage rates

What's Driving Home Values (Part 5)

21 implied HN points • 30 Sep 22
  1. Rents influence home values over time.
  2. Interest rates play a role in asset values.
  3. Changes in home prices can contradict traditional models.

July 2022 Tracker Update

21 implied HN points • 18 Aug 22
  1. The current housing market trends may not be solely influenced by interest rates.
  2. Expensive cities saw a reversal in home prices in July, potentially due to other factors like local costs and taxes.
  3. The housing cycle may have complex drivers beyond just interest rates, such as population shifts impacting different city markets.

Market Power in Housing Construction

2 HN points • 21 Feb 24
💼 Business Market Power Economic Analysis
  1. There is a widely held notion that the homebuilding industry may have oligopolistic power, potentially stemming from a misdiagnosis of the 2008 crisis.
  2. US home construction markets have been experiencing unusual behavior, with demand exceeding supply capacity, builders selling incomplete homes while pushing input prices higher, showing signs not typical of an oligopoly.
  3. Blaming corporations and outsiders for housing issues may perpetuate deep-seated prejudices and prevent solving communal problems effectively.

Housing Supply, Costs, and Urban Value (Part 3)

3 HN points • 23 Aug 23
  1. Demand for housing becomes inelastic under conditions of locational scarcity.
  2. Real rental expenditures have been negatively correlated with rent inflation over time.
  3. Investing less in housing leads to a decline in the value of housing services and increases rent inflation.

Rent Inflation and Housing Supply & Demand

1 HN point • 19 Jan 24
  1. The CPI rent measure may lag true inflation due to sticky existing tenant rents.
  2. New-tenant rent estimates can provide a better real-time reflection of market conditions.
  3. Housing supply is slow to change; demand shocks impact rent trends minimally.

"Reassessing the role of supply and demand on housing bubble prices"(Part 1)

3 HN points • 08 Dec 22
  1. The paper discusses the impact of supply and demand on housing bubble prices from 2002 to 2010.
  2. Credit supply variables showed strong correlations with rising prices, especially in areas with constrained supply.
  3. The study uses a new variable to better understand the effects of credit boom on housing prices, suggesting it was less significant than previously believed.

Where would housing expand with broad upzoning?

1 HN point • 10 Dec 23
  1. Broad upzoning may lead to households moving into suburbs rather than urban cores due to preferences for space and shorter commutes.
  2. Expensive cities are not necessarily expensive due to high demand or amenities, but rather because of limited housing construction.
  3. Home prices in dense neighborhoods may rise due to demand but also because they are inferior housing options for poorer families.

What kind of good is housing?

1 HN point • 15 Nov 23
  1. Housing can be seen as a luxury good due to scarcity and value in certain cities.
  2. In cities with inadequate housing supply, housing shifts from a necessity to a luxury.
  3. Density can be considered an inferior good, with cost increasing in densely populated areas.

Housing supply per capita eats your brain

2 HN points • 04 Apr 23
  1. Population growth alone does not indicate sufficient housing supply.
  2. Constraints on housing production can lead to displacement and housing shortages.
  3. Simply comparing housing construction rates to population growth may not accurately reflect housing supply conditions.

"Rising Home Prices Are Mostly from Rising Rents"

3 HN points • 21 Aug 22
  1. Rising home prices are mostly influenced by rising rents, not general inflation.
  2. Inelastic housing supply is a key factor raising costs for families with low incomes at the metro area level.
  3. Recent trends suggest that inelastic housing supply is the primary driver of rising home prices.

Who Causes Problematic Housing Demand?

2 HN points • 23 Feb 23
  1. Addressing housing demand is complex due to control, externalities, and political implications.
  2. Municipalities play a key role in housing decisions and governance.
  3. Assumptions about housing demand sources may distract from the actual problem of supply and regulation.

What if we can’t expect cities to build more?

1 HN point • 02 Feb 23
  1. In housing, if cities can't build more, then more money and credit are needed.
  2. Conservative-leaning individuals should support supply advocacy in housing.
  3. Accepting the status quo in high-priced cities like LA means accepting most of the housing market dynamics.

Update on rent trends, through September 2023

0 implied HN points • 03 Nov 23
  1. Rent trends indicate a moderation in excess rent inflation due to increased construction activities.
  2. Persistent rent inflation over the past 8 years could continue accumulating, even with a recent downshift.
  3. Biases such as recency bias and money illusion may impact the analysis of rent trends and the construction industry.

Quick Perspective Review on Housing Starts and Recessions

0 implied HN points • 04 Nov 23
  1. Home prices being propped up by various factors like Fed stimulus and low interest rates may eventually face a downturn like in 2008.
  2. The collapse in home prices in 2008 was preceded by clues like dropping new home sales, declining housing starts, and high cancellations in mid-2000s.
  3. Leading indicators such as construction and home prices have remained stable, suggesting the importance of monitoring these indicators for foreseeing a recession.

October 2023 Residential Sales and Homebuilders Update

0 implied HN points • 27 Nov 23
  1. The October 2023 residential sales trend remains stable with some minor fluctuations.
  2. Supply chain constraints have slightly elevated months of inventory, but are working out of the system.
  3. Sales have been showing a positive trend since early 2022, expected to continue as supply chains normalize.

Thoughts on Jerome Powell's Housing Comments

0 implied HN points • 03 Dec 22
  1. Jerome Powell noted a housing bubble from low pandemic rates and shifting demands.
  2. Fed policy and mortgage rates don't always have direct and predictable effects on the housing market.
  3. Data suggests rent rather than interest rates may be a primary factor influencing home values.

"Price is the Medium Through Which Housing Filters Up or Down": Part 3

0 implied HN points • 22 Nov 22
  1. Price to income ratios can differ in metro areas and change over time, affecting housing costs for different income groups.
  2. Inadequate housing mainly raises costs for the poor, despite appearances that it affects the rich more.
  3. Understanding price to income slope can give insight into supply conditions and their impact on housing markets.