The Unassuming Economist

On cross-country:

• Agglomeration benefits are here to stay. Building more homes in the most productive cities could massively boost productivity – Work in Progress

On the US—developments on house prices, rent, permits and mortgage:    

• Quarterly Forecast: Rapidly Rising Rates & Declining Demand Driving a Housing Market Slowdown – Freddie Mac
• Renters Hit Breaking Point in a Sudden Reversal for Landlords. Affordability pressures and inflation are holding back tenants, forcing landlords to ease off big increases. – Bloomberg
• Case-Shiller: National House Price Index “Continued to Decelerate” to 13.0% year-over-year increase in August. FHFA: “House prices fell nationwide in August, down 0.7 percent from the previous month” – Calculated Risk
• House Prices Lower than a Year Ago in 4 Metros. Case-Shiller Home Price Index Update – Real Estate Decoded
• U.S. home price growth slows in August, surveys show – Reuters
• Inflation Adjusted House Prices 2.3% Below Peak. House Price-to-Rent Ratio Declines to 3.1% Below Peak – Calculated Risk

On the US—other developments:    

• Apartment Builders Didn’t Get the Housing Slump Memo. Multifamily units make up the majority of a record number of homes under construction and are showing few signs of a slowdown. – Bloomberg
• House Price Responses to Monetary Policy Surprises: Evidence from the U.S. Listings Data – San Francisco Fed
• 11th Annual Housing Conference – AEI
• Household Size Limitations and Housing Costs – AEI
• Final Look at Local Housing Markets in September. Sales Down Sharply, Inventory Increased, New Listings Down – Calculated Risk 
• Home Buyers’ Focus on Affordability Drives WSJ/Realtor.com Housing Index. Johnson City, Tenn., benefited from low prices and taxes to lead third-quarter rankings – Wall Street Journal
• Builders Say They’re Ready for This Housing Slowdown. ‘I’ve Learned My Lesson.’ Meltdown of 2007-09 fostered less risky tactics; not as much debt – Wall Street Journal
• The housing market downturn is about more than interest rates – American Banker
• New Home Sales Decreased in September; Completed Inventory Increased. New Home Sales Decrease to 603,000 Annual Rate in September – Calculated Risk
• Fresh Evidence of a Housing Market Slowdown – Wall Street Journal

On China:

• China Home Prices Fall for 13th Month as Property Woes Persist. New-home prices slid for 13th straight month in September. Slew of steps to support market have yet to boost confidence – Bloomberg
• China’s Property Crisis Is Fueling Record Loss in BEA Debt. Yield to call on BEA AT1 dollar debt rose by record in October. BEA says proactively managing its China real estate portfolio – Bloomberg

On other countries:  

• [Australia] Australia Asks Its Biggest Investors to Help Fix Housing Crisis. Government announces new plan for affordable homes in budget. Plan will initially help fund 10,000 homes over five years – Bloomberg
• [Greece] Young Greeks priced out as inflation, rents soar – Reuters
• [United Kingdom] Major Banks Upbeat on UK House Price Growth Despite Rising Rates. Barclays, HSBC among firms predicting positive UK price growth. Santander CFO says he does not expect big price drops – Bloomberg

On cross-country:

• A global house-price slump is coming. It won’t blow up the financial system, but it will be scary – The Economist
• Global Housing Market Pain Has Echoes of a Crash 30 Years Ago. Interest-rate hikes, stretched affordability are taking a heavy toll – Bloomberg 
• The implications of buying a house at the peak of a business cycle – VoxEU

On the US—developments on house prices, rent, permits and mortgage:    

• The Rent Revolution Is Coming. For the 44 million households who rent a home or apartment in the U.S., inflation keeps pushing costs higher and higher. Anger is rising too. It could be a breaking point. – New York Times
• When Mortgage Rates Might Stop Rising, and More Takeaways From a Top Housing Economist – Barron’s
• As US Mortgage Rates Near 7%, a Warning They Could Go Much Higher. Realtors’ economist Yun says 8.5% is next level of resistance. Rates on 30-year fixed mortgages hit 20-year high at 6.92% – Bloomberg 
• The Fed is facing a housing Catch-22. Higher rates are killing housing supply as well as demand – Quartz
• Single-Family Permits Decline in August 2022 – NAHB
• U.S. single-family home starts fall to lowest level in more than two years – Reuters
• Existing Home Sales Continue to Drop Amid Rising Mortgage Rates – NAHB  

On the US—other developments:    

• Recession Fears Hit Risky Mortgage Debt Amid Default Concerns. Faltering home prices are hurting investors’ demand for junk-rated mortgage securities sold by housing giants Fannie and Freddie – Wall Street Journal
• Is Wall Street Really to Blame for the Affordable Housing Crisis? – New York Times
• Comparing Measures of Housing Inflation – San Francisco Fed
• Housing shortage risks breaking the American dream. Rising rates are compounding difficulties for buyers to find affordable homes – FT
• House Prices to National Average Wage Index. New Data for 2021 Wages Released This Morning – Calculated Risk
• The US housing market’s big chill. As soaring mortgage rates push home ownership beyond reach for many, demand is cooling and prices are falling – FT
• Some “Good News” for Homebuilders – Calculated Risk
• Increasing California Housing Supply with SB-9 and SB-1 – American Enterprise Institute

On China:

• China’s Bursting Housing Bubble Will Rock the Economy for Years. China’s billions in stimulus failing to spark housing demand. Some economists are calling for a market bottom by year-end – Bloomberg
• Marriage and Homeownership in China – SSRN

On other countries:  

• [Ireland] Ireland relaxes crisis-era mortgage rules. First-time buyers will be allowed to borrow more but high costs and acute housing shortage remain – FT
• [Israel] Israeli housing prices keep soaring, up a record 19% from last year. Market continues to defy expectations despite a drop in demand, rising interest and mortgage rates, and global property trends; cost of living index also up 4.6% over last year – Times of Israel
• [Spain] Spain’s banks seek extending lifespan of mortgages for vulnerable households – Reuters
• [United Arab Emirates] Dubai’s Luxury Property Market Is Cashing In on the Global Slowdown. The emirate’s property boom is attracting a wild assortment of super-rich buyers. – Bloomberg
• [United Kingdom] London Homes in Financial Districts Saw Double-Digit Price Drops – Bloomberg
• [United Kingdom] Bank of England warns mortgage defaults to rise in months ahead. Survey of lenders paints gloomy picture of new deals drying up and end to ‘golden era’ of cheap mortgages – The Guardian
• [United Kingdom] Annual mortgage bills to rise by £5,100 for 5mn UK households, study shows. Homeowners in London and lower income earners are the most at risk, Resolution Foundation finds – FT
• [United Kingdom] UK Mortgage Market Shows Signs of Steadying – Bloomberg
• [United Kingdom] What would a UK housing crash look like today? Four previous housing downturns have ominously familiar elements to today’s situation — so what can we learn from the past? – FT

On cross-country:

• Analysing drivers of residential real estate (RRE) prices and the effects of monetary policy tightening on RRE vulnerabilities – European Central Bank
• Evaluating housing market risks using a combined demand-supply framework – European Central Bank
• The transmission and effectiveness of macroprudential policies for residential real estate – European Central Bank
• Why Home Prices are Poised to Fall – Goldman Sachs
• Euro Area House-Price Gains Slow for First Time Since Pandemic – Bloomberg 
• Sharing Economy and its Effects on Housing Markets – UNECE
• Soaring mortgage rates to pile pressure on property markets worldwide. Housing markets face seismic change as low interest rate environment ends – FT
• Housing Taxation in OECD Countries – OECD
• Property Boom Coming To An End, New UBS Report Warns – AFP
• Exciting, boring, and non-existent skylines: Vertical building gaps in global perspective – VoxEU
• Declining Demand Drives Price Pullback – Zillow

On the US—developments on house prices, rent, permits and mortgage:    

• US Mortgage Rates Rise for Seventh Week to Highest in 16 Years. Fixed 30-year rate jumps to 6.75% in last week of September. MBA index of applications to buy, refinance a home tumbles – Bloomberg
• This Is What 7% Mortgages Will Do to the Housing Market – Bloomberg
• When will house prices go down? These economists see a ‘prolonged slowdown’ — and predict dramatic declines in home values – MarketWatch
• Disentangling Rent Index Differences: Data, Methods, and Scope – BLS
• Mortgage Activity Continues to Fall as Rates Rise – NAHB

On the US—other developments:    

• 11th Annual Housing Conference on November 30 to December 1 – AEI
• Christopher J Waller: The economic outlook with a look at the housing market – FED
• Republicans weaponise US mortgages in pre-midterms push. Federal Reserve interest rate increases have handed GOP ammunition ahead of elections by raising housing payments – FT
• Heterogenous Rates of Return on Homes and Other Real Estate: Do the Rich Do Better? Do Black Households Do Worse? – NBER
• If America Needs Starter Homes, Why Are Perfectly Good Ones Being Torn Down? Many communities effectively ensure the only viable replacement for a starter home is a new one that’s much larger and more expensive. – New York Times
• Here’s How Weird Things Are Getting in the Housing Market. We’re hitting milestone after milestone in the US. – Bloomberg 
• Current State of the Housing Market. This is a market overview for mid-October – Calculated Risk
• MBA: Mortgage Credit Availability was Never Excessive During the Recent Housing Boom – Calculated Risk
• US property sector braced for job cuts as rate rises crush home sales. Real estate business has dried up as a pandemic-inspired boom comes to a dramatic end – FT
• Home Flippers Get Burned by US Housing Market’s Sudden Slump. Falling demand and rising interest rates mean some investors are likely to take losses on quick deals. – Bloomberg
• Low Supply Could Support a Drooping Housing Market, Wells Fargo Says – Wall Street Journal
• 2nd Look at Local Housing Markets in September. Sales and New Listings Down Year-over-year, Inventory Up – Calculated Risk 

On China:

• China property crisis spoils Communist party’s moment of triumph. Officials take cautious approach to tackling overleveraged sector that threatens economic growth – FT
• Caixabank proposes sector-wide freeze in variable mortgage costs, source says – Reuters
• China Evergrande’s Debt-Crisis Fallout: Losses, Layoffs and More Defaults. The property titan’s financial troubles have spilled over to construction companies, interior decorators, and many others it owes money – Wall Street Journal
• China Property Debt Crisis Deepens as State-Aided Firm Defaults. Developer missed coupon on Hong Kong dollar convertible note. CIFI blames holiday for payment delay but warns about default – Bloomberg
• Chinese Local Governments Buying Houses to Aid Property Sector. Suzhou plans to buy about 10,000 units, Securities Times says. Jinan city proposed to purchase 3,000 homes to rent out – Bloomberg
• China’s Bursting Housing Bubble Will Rock the Economy for Years – Bloomberg

On other countries:  

• [Canada] Labour shortage to restrict Canadian housing supply -CMHC – Reuters
• [Canada] Rosenberg Sees 1990s-Style Canada Housing Bust Hurting Spending – Bloomberg
• [Hong Kong] Home prices in Hong Kong could fall 30%, predicts Goldman Sachs – Fortune
• [Hong Kong] Hong Kong’s Property Market Is Tumbling as Unsold Homes Pile Up. Rising rates add to slump caused by Covid curbs, brain drain. Home prices, down 8% already this year, poised to dip further – Bloomberg
• [New Zealand] Economics class video: NZ housing — a canary in the coal mine? – FT
• [Singapore] Rich mainland Chinese snap up luxury homes in Singapore despite tax hikes – Reuters
• [Singapore] Singapore Home Prices Won’t Defy Gravity for Long. The fastest quarterly increase in suburban real-estate prices in 13 years will make the city-state uncomfortable. Authorities will act again if rising interest costs fail to cool demand. – Bloomberg
• [Singapore] Singapore Apartment Rents Soar 31% With Further Gains to Come. Private apartment rents up 31% in year through September. A shortage of home supply could push more people to rent – Bloomberg
• [Spain] Spanish House Prices Reach Highest Level in a Decade – Bloomberg
• [Sweden] Swedish Housing Market Slump Deepens on Rate, Energy Worries. Apartment prices have fallen 6% on year, houses are down 3%. Record-high energy costs, interest rates impact demand – Bloomberg
• [United Kingdom] Kwasi Kwarteng to meet UK bank chiefs over mortgage market turmoil. Chancellor likely to be asked about 8% surcharge on bank profits – FT
• [United Kingdom] Britain’s mortgage market is adjusting to higher interest rates. But it will be a painful process for existing and wannabe homeowners – The Economist
• [United Kingdom] Kwarteng considers extending mortgage guarantee scheme. Initiative may continue beyond December as bank bosses raise concerns over mortgage market – The Guardian
• [United Kingdom] UK house price growth cools as rate rises pinch. Cost of a typical home eases from previous record to £293,835, says Halifax – FT
• [United Kingdom] British banks’ mortgage payday comes with sting in the tail – Reuters
• [United Kingdom] Chancellor Kwarteng Urged for Action to ‘Defuse Mortgage Ticking Time Bomb’ – Bloomberg 
• [United Kingdom] Paying a Mortgage in Britain Is No Longer Cheaper Than Renting. Mortgage payments to eat up 40% of income, UBS analysts say. Homebuilder stocks may be attractive after 50% drop this year – Bloomberg
• [United Kingdom] U.K. Housing Market Heads for Mortgage-Rate Shock. With a sharp rise in mortgage rates, homeowners’ monthly payments are set to soar. – Wall Street Journal
• [United Kingdom] Demand for new-build homes cooling fast, says Barratt. UK’s largest housebuilder cuts profit estimate – FT

On cross-country:

• European Real Estate’s Decade-Long Party Is Coming to an End. A €24 billion refinancing gap threatens to spur forced sales. Landlords are holding firm for now but pressure is building – Bloomberg
• Housing Dynamics: Theory Behind Empirics – NBER

On the US—developments on house prices, rent, permits and mortgage:    

• When Will Housing Prices Fall? The Federal Reserve’s fiscal policy is meant to curb inflation, but it has a countervailing effect of squeezing an already tight real estate market, according to Wharton’s Susan Wachter. She explains why home prices likely won’t come down without significant unemployment. – Wharton
• US Home Prices Now Posting Biggest Monthly Drops Since 2009. Cities facing steepest correction include San Francisco. Inventory levels stayed relatively flat, data provider says – Bloomberg
• Wall Street: The U.S. housing market to see the second biggest home price decline since the Great Depression – Fortune
• Housing prices: ‘We’re looking at 10-20% discount off retail prices,’ real estate investor says – Yahoo Finance 
• With Mortgage Rates Soaring, the Housing Market Takes Another Hit. As the average 30-year mortgage rate eclipses 7 percent, home buyers and sellers are confronting sticker shock. – New York Times
• Will Anyone Ever Buy or Sell a Home Again? High interest rates! Just what this bonkers housing market needed. – Slate
• Goldman Sees US House Prices Falling 5% to 10% – Calculated Risk
• Big Federal Stimulus, Home-Value Spike Won’t Ease Next Slump – Dallas Fed

On the US—other developments:    

• Wonking Out: How the Remote Work Craze Made Housing Affordability Worse – New York Times
• Housing expert: ‘Sellers aren’t selling’ as mortgage rates climb – Yahoo Finance
• House Prices Are Cooling Down. But That Doesn’t Mean We’re Heading for a Bust. – Barron’s
• How to Increase Housing Affordability: Understanding Local Deterrents to Building Multifamily Housing – Boston Fed
• The housing market is stuck – Axios
• Eviction Expectations in the Post-Pandemic Housing Market – New York Fed
• California Is Actually Making Progress on Building More Housing – New York Times 
• The Housing Revolution Is Coming. Accessory dwelling units might just spell the end of the American suburb as we know it—in the best possible way. – The Atlantic

On China:

• China to relax floor on mortgage rates to revive housing sector – Reuters
• China property shares rally on policy support. Beijing has accelerated measures in an attempt to shore up confidence in the real estate sector – FT
• China property woes trigger decline in global cement output. Biggest fall in at least two decades is concrete evidence of impact of real estate crisis – FT 
• Why China’s leadership must respond to the country’s property crisis – Atlantic Council
• China’s property crash: ‘a slow-motion financial crisis’. In the first part of a series, the impact of falling house prices is spreading to local government finances and the broader economy – FT 

On other countries:  

• [Australia] Australian House Prices Drop as Steep RBA Rate Hikes Sour Demand. Bellwether Sydney sees prices slide for eighth straight month. Slower pace of drop may not signal worst is over: CoreLogic – Bloomberg
• [Australia] House price correction could be over by early 2023: CoreLogic – Financial Review 
• [Australia] Property prices dropped further in September and falls ‘could accelerate’ again with rate rise. Investors and banks predict RBA will raise cash rate further on Tuesday, while rent increases begin to slow around Australia – The Guardian
• [Canada] Canada Cuts Home-Price Outlook, Projecting Drop as Deep as 15%. Inflation ‘more persistent’ than expected, CMHC CEO says. Higher rates, years of price gains crushed affordability: RBC – Bloomberg
• [Canada] Homes in Canada Have Never Been So Unaffordable, RBC Says. Rates push ownership costs to 60% of median household income. Prices have dipped but are still 44% higher than in 2019 – Bloomberg
• [Canada] Toronto Home Prices Are Down 17% as Sales and Listings Plunge. Barely 5,000 homes sold in Canada’s largest city in September. Traders see central bank raising benchmark rate again Oct. 26 – Bloomberg
• [Hong Kong] Goldman Says Hong Kong Home Prices May Fall 30%. Rapidly rising interest rates prompt bank to revise forecast. World’s least affordable housing market is in a rare downturn – Bloomberg
• [Ireland] Irish House Price Growth May Slow as Economists See 7% Overvaluation – Bloomberg
• [New Zealand] House asking prices dropping $10k per month on average – report – RNZ
• [New Zealand] New Zealand House Prices Suffer Near-Record Quarterly Slump. Worst may not be over as RBNZ keeps raising rates: CoreLogic. Wellington’s annual price decline approaches double digits – Bloomberg
• [Saudi Arabia] Saudi Arabia’s SRC extends mortgage benchmark maturity to 30 years – Reuters
• [Singapore] Singapore tightens housing loan limits as rates rise – Reuters
• [United Kingdom] UK House Prices Stagnate as Market Flashes Warning Signs. Headwinds grow stronger, rising rates stretch affordability. Nationwide says annual price growth is now back below 10% – Bloomberg   
• [United Kingdom] More homes selling at a loss as rising interest rates push down property prices. Trend most pronounced in Melbourne and Sydney, reflecting sharper downturns in major cities – The Guardian
• [United Kingdom] Inside the breakdown of the UK’s mortgage machine. Market turmoil sparked by mini-budget saw banks scrambling and 1,688 home loans pulled from shelves – FT
• [United Kingdom] Buy-to-let landlords under strain from mortgage rate rises. Sharp jump in interest charges for those refinancing will hit profits – FT
• [United Kingdom] UK house price growth stalls as rate rises bite. Average price unchanged from August to September but mini-Budget fallout hits mortgages – FT  
• [United Kingdom] UK lenders return to market with mortgage rates near 6%. Banks and building societies offer pricier deals after week of turmoil for UK gilts – FT
• [United Kingdom] UK lenders to face pressure to cut mortgage rates if markets stabilize. Average for two-year fixed deal is now 5.97%, up from 5.75% on Monday – FT

From a new IMF working paper by Kenneth Rogoff and Yuanchen Yang:

“This paper provides new estimates of the housing stock, construction rates and price developments by city tier in China in order to understand where imbalances might be concentrated, and the implications of any significant contraction. We also update estimates of the size of China’s rapidly evolving real estate sector through 2021, allowing one to look at the initial impact of COVID-19, as well as extending the analysis to incorporate urban-expansion related infrastructure construction. We argue that China overall faces imbalances between supply and demand for housing stock, but the problem is significantly deeper outside tier 1 cities.”