The hottest Real Estate Substack posts right now

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"The Lock-In Effect of Rising Mortgage Rates"

CalculatedRisk Newsletter ā€¢ 43 implied HN points ā€¢ 19 Mar 24
šŸ’° Finance Real Estate
  1. Homeowners with low interest rates might be hesitant to sell due to higher mortgage rates, impacting the overall housing market.
  2. Rising mortgage rates create a 'lock-in effect,' reducing the probability of home sales and affecting affordability.
  3. The lock-in effect contributes to limited housing supply, increases home prices, and restricts mobility, but is expected to fade over time.

2nd Look at Local Housing Markets in November

CalculatedRisk Newsletter ā€¢ 19 implied HN points ā€¢ 11 Dec 24
šŸ’° Finance Real Estate
  1. In November, home sales increased by 5.8% compared to last year, showing a positive trend in the housing market. This is the second year in a row that sales have gone up after a long period of decline.
  2. Active inventory of homes for sale rose by 26% year-over-year, which is good for buyers, but there are still sharp differences based on the region. Areas like Florida and Texas saw significant increases in available homes.
  3. Mortgage rates fell to the lowest level in two years, averaging between 6.18% and 6.43% in September and October. However, recent increases in rates, now close to 7%, might slow down future sales.

NAR: Existing-Home Sales Decreased to 4.08 million SAAR in January

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 21 Feb 25
šŸ’° Finance Real Estate
  1. Existing-home sales have decreased to 4.08 million in January, which is a drop of 4.9% from the previous month, but it's still a 2.0% increase compared to January 2024.
  2. The housing inventory is rising, reaching 1.18 million units, up 16.8% from last year, which shows there is more supply available than before the pandemic.
  3. Despite the drop in sales, this is the fourth consecutive month with year-over-year increases, suggesting some positive trends in the market.

Part 2: Current State of the Housing Market; Overview for mid-March 2024

CalculatedRisk Newsletter ā€¢ 43 implied HN points ā€¢ 14 Mar 24
šŸ’° Finance Real Estate
  1. The Case-Shiller National Index reported a 5.5% year-over-year increase in house prices in December, with expectations for a slightly more positive change in January.
  2. Monthly, the seasonally adjusted Case-Shiller National Index experienced an 0.19% increase, marking the eleventh consecutive month of increase, yet the smallest growth since January 2023.
  3. The post discusses the outlook for house prices in 2024 and invites readers to subscribe for more detailed information.

Part 1: Current State of the Housing Market; Overview for mid-March 2024

CalculatedRisk Newsletter ā€¢ 43 implied HN points ā€¢ 13 Mar 24
šŸ’¼ Business Real Estate
  1. The current housing market inventory is increasing year-over-year but remains below pre-pandemic levels.
  2. New listings for existing homes were up 11.3% year-over-year in February according to the Realtor.com report, showing a positive trend.
  3. Factors like the '3 Dā€™s' (Death, Divorce, Disease), unemployment, and financial considerations affect homeowners' decisions to sell their homes, impacting market dynamics.
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Why are homebuilder rate buydowns effective?

Erdmann Housing Tracker ā€¢ 63 implied HN points ā€¢ 08 Sep 23
šŸ’° Finance Real Estate
  1. Market prices aren't changing due to temporary factors, leading builders to use rate buydowns instead.
  2. Builders are using rate buydowns to close the gap between mortgage rates and other interest rates in the current market.
  3. The unique market conditions make rate buydowns a strategic tool for builders, influencing the mortgage market stability.

Freddie Mac House Price Index Increased in January; Up 6.2% Year-over-year

CalculatedRisk Newsletter ā€¢ 43 implied HN points ā€¢ 29 Feb 24
šŸ’° Finance Real Estate
  1. Freddie Mac's National Home Price Index rose 6.2% year-over-year in January, marking a positive trend in the housing market
  2. The index has been climbing consecutively for the past 13 months, showing sustained growth in home prices
  3. Seasonally adjusted data reveals that 16 states and D.C. experienced price declines, with Austin being the worst-performing city

New Home Sales at 661,000 Annual Rate in January

CalculatedRisk Newsletter ā€¢ 43 implied HN points ā€¢ 26 Feb 24
šŸ’° Finance Real Estate
  1. In January 2024, new home sales were reported at a seasonally adjusted annual rate of 661,000, showing a positive trend compared to the previous year.
  2. The median new home price has dropped by 15% from its peak, indicating potential shifts in the real estate market.
  3. Inventory levels for new homes show variations, with completed homes for sale at a level close to the norm, while homes under construction are high but below previous peak levels.

Fannie and Freddie: Single Family Serious Delinquency Rates Increased in December

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 04 Feb 25
šŸ’° Finance Real Estate
  1. Single-family serious delinquency rates for Fannie Mae and Freddie Mac have increased slightly in December, indicating more homeowners are struggling to keep up with mortgage payments.
  2. Fannie Mae's delinquency rate rose to 0.56% while Freddie Mac's went up to 0.59%, both of which are still lower than pre-pandemic levels.
  3. Older loans from before 2009 show higher serious delinquency, whereas more recent loans are performing better, but there are still some lingering issues from past housing bubble years.

1st Look at Local Housing Markets in October

CalculatedRisk Newsletter ā€¢ 19 implied HN points ā€¢ 07 Nov 24
šŸ’° Finance Real Estate
  1. Local housing markets saw their first year-over-year sales increase since August 2021. This is a positive sign for the real estate industry.
  2. The data includes comparisons to October 2019, showing how current markets stack up against pre-pandemic times.
  3. Over 40 local housing markets across the US are being tracked for this analysis. This gives a broad view of housing trends in different regions.

1st Look at Local Housing Markets in February

CalculatedRisk Newsletter ā€¢ 38 implied HN points ā€¢ 08 Mar 24
šŸ’° Finance Real Estate
  1. Early reports suggest an increase in home sales from January to February.
  2. Closed home sales in February were based on contracts signed in December and January when mortgage rates were lower compared to the previous months.
  3. Inventory for housing markets in January was down year-over-year but has seen a slight increase compared to the previous year.

Inflation Adjusted House Prices 1.5% Below 2022 Peak

CalculatedRisk Newsletter ā€¢ 19 implied HN points ā€¢ 01 Nov 24
šŸ’° Finance Real Estate
  1. House prices, when adjusted for inflation, are currently about 1.5% lower than their peak in 2022. This means that even though prices seem high, they aren't as high as they were last year when considering the money's value.
  2. Real estate prices have been increasing steadily over time, and currently, they are 11% above the prices during the housing bubble of 2006. People should keep an eye on these real prices to better understand the market.
  3. The price-to-rent ratio is still down around 8% from its highest point in 2022. This suggests that renting is somewhat more affordable compared to buying, which is an important factor for homebuyers to consider.

The "Home ATM" Closed in Q4

CalculatedRisk Newsletter ā€¢ 38 implied HN points ā€¢ 07 Mar 24
šŸ’° Finance Real Estate
  1. During the housing bubble, many homeowners used their perceived home equity as a 'Home ATM,' contributing to the subsequent housing bust when prices declined.
  2. Refinancing activity declined in early 2022 as mortgage rates rose, leading to a shift where homeowners started using home equity loans to access their equity.
  3. Despite a decline in demand for HELOCs and a decrease in refinancing activity, Mortgage Equity Withdrawal (MEW) remained low throughout Q4 2023, indicating balanced equity borrowing and principal payments.

Housing Starts Increased to 1.499 million Annual Rate in December

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 17 Jan 25
šŸ’° Finance Real Estate
  1. Housing starts for December were 1.499 million, which is 15.8% higher than November but 4.4% lower than December 2023.
  2. Single-family housing starts rose slightly compared to November, while multi-family starts saw a drop year-over-year.
  3. Total housing starts decreased by 2.6% in 2024 compared to 2023, with single-family homes seeing a slight increase while multi-family homes declined significantly.

Part 2: Current State of the Housing Market; Overview for mid-January 2025

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 15 Jan 25
šŸ’° Finance Real Estate
  1. House prices have been steadily increasing, showing a 3.6% rise year-over-year as of October and continued growth is expected.
  2. There has been a consistent upward trend in house prices, with a 0.35% monthly increase noted, marking the 21st month of growth.
  3. The outlook for house prices in 2025 remains uncertain, with various factors influencing future changes in the housing market.

no. 43: too good to refuse

let them eat cake ā€¢ 59 implied HN points ā€¢ 21 Aug 21
šŸ’¼ Business Real Estate
  1. Property rights in real estate are distributed in ways that differ from typical property, with value determined by the surrounding environment.
  2. Restaurants play a significant role in gentrifying neighborhoods, contributing to their perceived desirability and financial value.
  3. Developers often provide incentives for restaurants to move in, as it can increase the overall value of the property and provide branding for the neighborhood.

3rd Look at Local Housing Markets in February

CalculatedRisk Newsletter ā€¢ 33 implied HN points ā€¢ 15 Mar 24
šŸ’¼ Business Real Estate
  1. The closed sales in February were mostly for contracts signed when mortgage rates were lower than in the previous months. This signifies a trend of lower mortgage rates impacting sales.
  2. Active inventory in February showed mixed trends with some areas experiencing significant year-over-year increases in inventory while others saw decreases compared to 2019.
  3. New listings in February were up year-over-year, but still remained at historically low levels. Most areas reported lower new listings compared to January 2019.

Q4 Update: Delinquencies, Foreclosures and REO

CalculatedRisk Newsletter ā€¢ 33 implied HN points ā€¢ 13 Mar 24
šŸ’° Finance Real Estate
  1. Most homeowners have substantial equity in their homes, which helps prevent a surge in foreclosures that could impact house prices.
  2. The distribution of interest rates on mortgages shows that a large percentage are under 4%, making it easier for homeowners to manage financially.
  3. Understanding key housing terms like forbearance, delinquency, foreclosure, and REO (Real Estate Owned) can help navigate discussions about property ownership.

More on Residential Sales Trends

Erdmann Housing Tracker ā€¢ 63 implied HN points ā€¢ 31 Mar 23
šŸ’¼ Business Real Estate
  1. High cancellation rates during Covid were not as alarming because of the booming sales at that time.
  2. Interest rates are not a reliable indicator for forecasting home sales and prices.
  3. Decline in cancellations and stable delivery numbers suggest a more positive outlook for the housing market.

Case-Shiller: National House Price Index Up 3.9% year-over-year in September

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 26 Nov 24
šŸ’° Finance Real Estate
  1. The national house price index increased by 3.9% from last year, showing steady growth in home values.
  2. Most cities saw home prices rise month-to-month, but some places like Los Angeles and Miami experienced declines.
  3. While year-over-year growth is still positive, the pace of increase is slowing down, indicating that the housing market might be stabilizing.

Lawler: Early Read on Existing Home Sales in June

CalculatedRisk Newsletter ā€¢ 4 implied HN points ā€¢ 18 Jul 25
šŸ’¼ Business Real Estate
  1. In June, existing home sales were around 3.92 million, which is slightly lower than May and last June. This shows a small decrease in the housing market activity.
  2. The average price of existing single-family homes went up by about 1.9% compared to a year ago. This indicates that home prices are still rising even if sales are down.
  3. The National Association of Realtors (NAR) will officially release the June home sales data soon. It's expected to be around 4 million sales, which is also a drop from the previous month.

Asking Rents Mostly Unchanged Year-over-year

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 06 Nov 24
šŸ’° Finance Real Estate
  1. Asking rents have mostly stayed the same year over year, with a slight decrease of about 0.7%. This means that renting is a bit cheaper now than it was last year.
  2. There are more rental apartments available now, which has led to a higher vacancy rate of 6.8%. This increase in supply is likely to keep rents from rising quickly.
  3. Single-family home rents did see a small increase of 2.4% year over year, but this is the slowest growth seen in some time. It suggests that rent prices in general are stabilizing.

Lawler: Rent Trends at some Large Holders of Multifamily Properties

CalculatedRisk Newsletter ā€¢ 28 implied HN points ā€¢ 11 Mar 24
šŸ’¼ Business Real Estate
  1. Rent growth has slowed sharply at large holders of multifamily properties like MAA, Equity Residential, and Avalon Bay Communities in the past year.
  2. Despite overall rent growth slowdown, year-over-year growth in rent renewals remained in the 4.5% - 5% range in January, showing a different trend.
  3. There is a lesson to be learned from the 1994-1995 Fed tightening episode where the Federal Reserve raised the policy rate significantly without triggering a recession, providing valuable insights for current monetary policymaking.

Freddie Mac House Price Index Increased in September; Up 3.6% Year-over-year

CalculatedRisk Newsletter ā€¢ 14 implied HN points ā€¢ 31 Oct 24
šŸ’° Finance Real Estate
  1. The Freddie Mac House Price Index went up by 3.6% compared to last year. This shows that house prices are on the rise.
  2. Many cities in Florida are struggling with real estate; 17 out of the 30 worst performing cities are located there.
  3. The Freddie Mac index is based on specific loans and includes sales data to track house prices accurately.

NAR: Existing-Home Sales Increased to 4.24 million SAAR in December

CalculatedRisk Newsletter ā€¢ 9 implied HN points ā€¢ 24 Jan 25
šŸ’¼ Business Real Estate
  1. Existing-home sales rose to 4.24 million in December, showing a 2.2% increase from November. This marks a positive trend after several months of decline.
  2. The median house price reached a record high of $407,500, reflecting a 6% increase from the previous year. This indicates that homes are becoming more expensive.
  3. Total housing inventory decreased to 1.15 million units, suggesting a tighter market. While inventory is down from last month, it has gone up 16.2% compared to last year.

Final Look at Local Housing Markets in January

CalculatedRisk Newsletter ā€¢ 23 implied HN points ā€¢ 26 Feb 24
šŸ’° Finance Real Estate
  1. The final look at local housing markets in January showed low existing home sales but an increase in new listings for the fourth month in a row.
  2. Active listings in January were up 3.0% year over year, highlighting the importance of monitoring inventory trends in the coming months.
  3. Closed sales in January saw a 3.0% increase year over year, revealing differences from sales in January 2019 and hinting at potential sales growth in February.

Lawler: Update on Invitation Homes Rental Trends

CalculatedRisk Newsletter ā€¢ 23 implied HN points ā€¢ 20 Feb 24
šŸ’° Finance Real Estate
  1. Invitation Homes focused on boosting occupancy rates in Q4 for peak leasing season, taking an aggressive stance.
  2. Renewal rates for rental properties were pushed lower than expected with renewal rate increases averaging 6.8%.
  3. Despite previous claims of pricing rentals at 'market' levels, recent data suggests that renewal rates have not followed this trend for Invitation Homes.

Quick Update on Housing

MacroCrunch ā€¢ 32 implied HN points ā€¢ 07 Aug 23
šŸ’° Finance Real Estate
  1. Most U.S. homeowners have low fixed-rate mortgages and a lot of equity.
  2. There is a structural shortage of housing in the United States.
  3. Despite mortgage interest rates increasing, the housing market outlook remains steady.

Inflation Adjusted House Prices 2.4% Below Peak

CalculatedRisk Newsletter ā€¢ 19 implied HN points ā€¢ 05 Mar 24
šŸ’° Finance Real Estate
  1. Real house prices in the US are currently 2.4% below the recent peak, indicating a slight decline in prices adjusted for inflation.
  2. It's important to consider the price-to-rent ratio to understand the affordability of housing markets.
  3. National house prices are historically high after being 10.2% above the bubble peak level, despite the market's ups and downs over 17 years.

Lawler: Update on American Homes for Rent (AMH)

CalculatedRisk Newsletter ā€¢ 19 implied HN points ā€¢ 27 Feb 24
šŸ’° Finance Real Estate
  1. American Homes for Rent (AMH) saw a decline in occupancy rate last quarter, contrasting with Invitation Homes.
  2. The average monthly rents of INVH and AMH seem to lead the CPI's Rent of Primary Residence by about two quarters, and rent growth has remained above the overall inflation rate.
  3. Rental inflation remains elevated for many single-family renters despite certain limitations in the rent trend comparisons and geographic focuses of these companies.

What Affordable Housing Actually Means

The Discourse Lounge ā€¢ 22 HN points ā€¢ 28 Jul 23
šŸ’¼ Business Real Estate
  1. Many people misunderstand what 'affordable housing' really means -- it's not just cheaper housing, but subsidized, rent-regulated housing.
  2. The terminology around housing has evolved over time, from 'public housing' to 'affordable housing', aiming to market the benefits to consumers.
  3. High housing costs are closely tied to high construction costs, and providing truly affordable housing requires addressing these underlying cost issues.

CRE Me a River

Malt Liquidity ā€¢ 5 implied HN points ā€¢ 07 Sep 23
šŸ’° Finance Real Estate
  1. Real estate market belief in constant growth can lead to risky investments
  2. Commercial real estate market faces challenges with liquidity and valuation
  3. Overreliance on real estate investments can have negative economic impacts

Housing affordability around the globe and what really helps

Klement on Investing ā€¢ 2 implied HN points ā€¢ 05 Mar 24
šŸ’° Finance Real Estate
  1. Data shows housing affordability has increased in most countries post the 2008 financial crisis due to low mortgage interest rates.
  2. National averages say the UK isn't as bad in housing affordability as perceived, with countries like Australia and France in a tougher spot.
  3. Analysis suggests government intervention, like offering housing benefits and building new homes, can notably improve housing affordability.

What's Going on with China's Stagnation?

Arpitrage ā€¢ 3 HN points ā€¢ 21 Aug 23
šŸŒ World Politics Real Estate
  1. There is a debate between two main schools of thought regarding China's growth hurdles: authoritarian expropriation risk and structural Keynesian views.
  2. The real estate boom-bust hypothesis suggests China's dependence on real estate and infrastructure may lead to weak growth ahead.
  3. The soft budget constraint thesis, rooted in authoritarianism and political economy problems, could also be contributing to China's growth issues.

Single Family Built-for-Rent Almost Doubled Since 2020

CalculatedRisk Newsletter ā€¢ 2 HN points ā€¢ 20 Feb 24
šŸ’¼ Business Real Estate
  1. The number of single-family units built for rent almost doubled from 2020 to 2023, showing a significant increase in this housing trend.
  2. About 18% of the built-for-rent units started in 2023 were single-family units, highlighting a shift in the housing market.
  3. While single-family completions built for sale saw a decrease, completed units built for rent were up 21% year-over-year, potentially affecting rental market supply and rent prices.

Unlock a Housing Boom through Depreciation Bonuses

Arpitrage ā€¢ 2 HN points ā€¢ 13 Feb 24
šŸ’¼ Business Real Estate
  1. Investment taxes play a crucial role in addressing the housing crisis by impacting housing affordability.
  2. Tax laws in the 1980s, especially changes in depreciation schedules, significantly influenced commercial real estate production.
  3. Adjusting accounting rules, like shortening depreciation schedules or allowing full expensing, could encourage a construction boom and potentially reduce rents.