The Unassuming Economist

Links to the week’s top housing market stories.

On US

• Housing’s Recession Already Happened – WSJ
• Housing market recession? Not likely. Prepare for hot post-pandemic prices – USA Today
• These Are the 10 Most Overpriced Housing Markets in the U.S. — 5 Are in Florida – Yahoo Finance

On rest of the world

• Global Migration Boom Keeps Housing Costs High – WSJ
• Popping Real Estate Bubbles Will Prove Painful – Bloomberg
• [Australia] House prices will keep rising into next year, says Domain, as immigration boosts demand – The Guardian
• [Australia] Australian house prices set to rise again, despite interest rate pain – AW
• [Australia] Sydney house prices to boom again – MACROBUSINESS
• [Canada] Luxury real estate markets in Canada saw divergent performance in the first half of 2023 – CTV News
• [Canada] Posthaste: The luxury housing market in Canada has undergone a major change – Financial Post
• [UK] UK housing market forecast to avoid slump despite zero growth in prices – The Guardian
• [UK] House prices predicted to fall 12pc with ‘little prospect’ of bounceback – Telegraph
• [UK] Banks, Housing, Markets, and UK CPI – Bloomberg
• [Euro] European home prices fall but don’t bet on a crash – DW
• [Sweden] Sweden Home Starts Indicator Hits 9-Year Low After Price Slump – Bloomberg
• [Germany] New housing construction set to strongly decline – DW
• [Danish] Danish Housing Market Better Than Feared, Mortgage Giant Says – Bloomberg

On cross-country:

• The housing supply problem. A four-part series on housing affordability in the UK and US – FT
• The Global Housing Inspection Report – 2023 Edition – Seeking Alpha
• How to reduce the damage done by gentrification. We cannot let our cities descend into islands of privilege amid seas of disadvantage. With the right policies and investments, a better future is possible – The Guardian

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

• The 30-Year Mortgage Is Saving the US Economy … or Is It? Long-term fixed-rate home loans help keep the housing market from collapse, but they make the overall economy less dynamic. – Bloomberg
• Higher Interest Rates Hit Home Prices Again. U.S. existing-home prices fell in May from a year earlier by the most in more than 11 years – Wall Street Journal
• Fraudulent Covid Aid Drove Up U.S. House Prices, Report Says. Researchers found that people who defrauded the government for pandemic relief poured money into housing markets, driving inflation in some areas – Wall Street Journal
• Small Mortgages Are Too Hard to Get. A shortage of loans for homes priced below $150,000 bars many American families from homeownership – Pew Charitable Trusts
• Case-Shiller: National House Price Index Decreased 0.2% year-over-year in April. “U.S. house prices rose in April, up 0.7 percent from March, according to the Federal Housing Finance Agency (FHFA) seasonally adjusted monthly House Price Index (HPI®).” – Calculated Risk
• Inflation Adjusted House Prices 3.8% Below Peak. Price-to-rent index is 8.4% below recent peak – Calculated Risk

On the US—other developments:    

• What Is Happening in the Housing Market? Home construction surged in May and prices have ticked up, even with interest rates at a 15-year high. The resilience has surprised some economists. – New York Times
• Only Zoning Reform Can Solve America’s Housing Crisis. By making it impossible to build enough homes in places where people want to live, local governments hurt the economy and democracy. – Wall Street Journal
• Final Look at Local Housing Markets in May – Calculated Risk
• Home Builders Learn to Love High Rates. Low supply of homes is giving builders ample reason to step up construction, despite high interest rates – Wall Street Journal
• Buying a home in the US is expensive – and that isn’t changing anytime soon. Even if there are fewer home buyers and prices have been falling slightly, they’re still much higher than pre-pandemic and for many, more unaffordable than ever – The Guardian
• US existing home sales edge up but prices drop by most since 2011 – Reuters
• Fannie and Freddie Serious Delinquencies in May: Single Family Declined, Multi-Family Increased – Calculated Risk
• New Home Sales increase to 763,000 Annual Rate in May. Median New Home Price is Down 16.2% from the Peak – Calculated Risk

On China:

• How to escape China’s property crisis. Lessons from a city that is flourishing – The Economist

On other countries:  

• [Germany] German house prices fall by record 6.8% as higher mortgage costs deter buyers. First-quarter drop in Europe’s largest property market is biggest since index began in 2000 – FT
• [Hong Kong] Hong Kong may relax mortgage loan-to-value ratios amid sluggish property market: Financial Secretary Paul Chan. The government, along with the Hong Kong Monetary Authority, will balance financial stability and the interests of first-time buyers, Paul Chan says. Chan’s comments come as Hong Kong’s residential market is showing fresh signs of weakness after a short-lived rebound in the first quarter – South China Morning Post
• [Ireland] Irish Home Prices Post First Year-on-Year Decline Since 2020. Average prices slip 0.5% in the second quarter from a year ago. Once-hot market still on edge after quarterly gain of 2.4% – Bloomberg   
• [Ireland] Strong Irish mortgage market unmoved by higher interest rates – Reuters
• [Turkey] Turkish property prices are soaring. A crazy interest-rate policy is mostly to blame – The Economist
• [United Kingdom] The Bank of England Owes Mortgage Payers a Big Apology. UK living standards are being hit by 8.7% CPI and 6% mortgage rates. – Bloomberg
• [United Kingdom] The Guardian view on mortgages: the crunch is coming. Westminster is forever blowing property bubbles. What happens when they burst? – The Guardian
• [United Kingdom] Making downsizing easier could help Britain’s housing crisis. Shuffling the pack by liberating under-occupied homes will have a bigger impact than building new ones – FT
• [United Kingdom] The UK mortgage market may need an overhaul, not handouts. There need to be longer-term questions about the peculiarities of housing borrowing in Britain – FT
• [United Kingdom] Young adults pay heaviest price for Britain’s exploding mortgage timebomb. Rising interest rates expose widening generational gulf, with millennials facing large increases in monthly payments – FT 
• [United Kingdom] Have We Reached the Tipping Point for UK House Prices? As mortgage rates rise, the most vulnerable areas are also the most expensive. – Bloomberg
• [United Kingdom] Why higher rates risk reigniting intergenerational conflict. A cohort of people in their mid-30s have probably been pummelled twice by monetary policy over the past decade – FT
• [United Kingdom] Cut Stamp Duty to fight inflation and expand housing supply. – IEA

On cross-country:

• Better Housing Policies in the Post-COVID-19 Era – OECD
• Madrid’s Rising Property Prices Threaten a Housing-Market Crunch. Spanish capital bucks trend of sliding prices in other cities. Impact of tight supply is also evident in London, Stockholm – Bloomberg

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

• US Single-Family Rent Growth Continues Yearlong Descent in April, CoreLogic Reports – CoreLogic
• US Housing Starts Surge Most Since 2016, Exceed All Estimates. Beginning construction jumped 21.7% to 1.63 million pace. May starts of single-family dwellings highest in 11 months – Bloomberg

On the US—other developments:    

• Today’s Rate Hikes Threaten to Push Up Tomorrow’s Housing Costs. Fewer builders are starting new homes amid high prices for materials and loans, threatening housing shortages – Wall Street Journal
• The State of the Nation’s Housing 2023 – Joint Center for Housing Studies
• US homebuilders: new construction a rare bright spot in real estate gloom. While sales of previously owned homes are down, prices have held steady – FT
• 3rd Look at Local Housing Markets in May – Calculated Risk
• Lawler: Early Read on Existing Home Sales in May – Calculated Risk
• Economic, Housing and Mortgage Market Outlook – June 2023 – Freddie Mac
• Some More Good News for Homebuilders – Calculated Risk
• America’s housing shortage is keeping home prices high – Axios
• America’s housing tailwind – Axios

On China:

• China Home-Price Growth Weakens as Housing Recovery Falters. New home prices rose 0.1% in May, slowest pace in four months. Slowdown comes as policymakers consider stimulus package – Bloomberg

On other countries:  

• [Australia] Australian PM pledges $1.4 billion for affordable homes – Reuters
• [Canada] Canada’s housing data shows recovery accelerating before rate hike – Reuters
• [New Zealand] Where Housing Prices Have Crashed and Billions in Wealth Have Vanished. In New Zealand, high interest rates have sent property prices sliding nearly 18 percent since November 2021. – New York Times
• [Sweden] Europe’s Worst Housing Market Shows Signs of Life – Bloomberg
• [Switzerland] Swiss Flats Up to 40% Pricier Than What Fundamentals Signal – Bloomberg
• [Turkey] Turkish property prices are soaring. A crazy interest-rate policy is mostly to blame – The Economist
• [United Kingdom] What steps could government take to help mortgage borrowers? As interest rates rise, cash-strapped households need speedy solutions to meet monthly payments – The Guardian
• [United Kingdom] Average mortgage rate for two-year fixed deal edges closer to 6%. Nationwide is latest lender to lift cost of deals as borrowers brace for 13th successive Bank of England interest rate rise – The Guardian
• [United Kingdom] Two of UK’s biggest lenders to raise mortgage rates. Pressure mounts on government struggling to contain cost of living crisis as NatWest and Nationwide push up cost of borrowing – FT
• [United Kingdom] The great British mortgage squeeze. Regaining control over inflation is the best way to support homeowners – FT
• [United Kingdom] First-time buyers struggle as mortgage products cut by 40%. Rising interest rates prompt lenders to clamp down on borrowers with small deposits – FT
• [United Kingdom] Mass UK house repossessions unlikely despite soaring mortgage rates. Regulatory reforms, increased levels of equity and fixed deals should protect many homeowners – FT

On cross-country:

• Is the global housing slump over? Why rising interest rates have not yet triggered property pandemonium – The Economist
• Global Residential Real Market Report – Q1 2023 – Global Property Guide

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

• Is the rent still too damn high? – FT
• Renters Are About to Get the Upper Hand. New-lease rents are poised to fall on an annual basis for only the second time since 2008 financial crisis – Wall Street Journal
• Lawler: Update on Mortgage/Treasury Spreads – Calculated Risk

On the US—other developments:    

• The “Home ATM” was Closed in Q1. Mortgage Equity Withdrawal (MEW) turns negative in Q1 2023 – Calculated Risk
• Climate Change and Homeowners’ Insurance Are on a Collision Course. As escalating catastrophes take a toll on profitability, insurance companies are getting better at looking forward. The results aren’t pretty. – Bloomberg
• Public Education and Intergenerational Housing Wealth Effects – NBER
• 2nd Look at Local Housing Markets in May – Calculated Risk
• 2023 Q1 Cross-Market Demand Report: Homeownership, Affordability, and Warmer Climates Influence Moving Patterns – Realtor
• Part 1: Current State of the Housing Market; Overview for mid-June – Calculated Risk
• Part 2: Current State of the Housing Market; Overview for mid-June – Calculated Risk
• Affordable Housing Woes Paint a ‘Bleak Picture’. So many developments have been sidetracked or delayed that some experts expect a “production cliff” to hit in a year or so, meaning fewer new homes coming onto the market. – New York Times

On China:

• Why China’s housing policies have failed – Peterson Institute for International Economics
• China’s property sector set to be persistently weak for years -Goldman – Reuters
• Iron Ore Sheds Nearly 5% After Goldman’s China Property Warning. Real estate weakness to be multiyear growth drag, bank says. Steel-making ingredient halts eight-day advance in Singapore – Bloomberg
• Economists posting their Ls. If a Chinese property market falls in the forest, could it not make too much of a noise? – FT
• Gold bars used to lure Chinese homebuyers amid market slowdown. Property developers struggle to rebuild confidence in housing market after three years of economic pain – The Guardian

On other countries:  

• [Australia] New Insights into the Rental Market – Reserve Bank of Australia
• [Australia] Forget death and taxes, the real certainty in Australia is rising house prices. A record number of interest rate rises has failed to take the wind out of the property market – but it’s good news for negative gearers – The Guardian
• [Ireland] Irish developer says up is the only way out of Dublin’s housing shortage. Johnny Ronan came to symbolise the country’s property-driven boom-to-bust cycle – FT
• [Italy] Wealthy Buyers Are Turning This Region Into One of Italy’s Hottest Home Markets. Once an impoverished area, Puglia has seen an influx of high-end buyers willing to spend millions on historic farmhouses and villas – Wall Street Journal
• [Korea] Bank of Korea Warns of Financial Risk as Real Estate Loans Fail. BOK flags delinquencies on real estate loans, non-bank risk. Governor Rhee Chang-yong says in text of speech Monday – Bloomberg
• [New Zealand] New Zealand must free up land, expand housing supply to ease home affordability, IMF says – Reuters
• [Sweden] Swedes’ View on Housing Market Brightens as Rates May Soon Peak – Bloomberg
• [United Kingdom] How stubborn inflation has undermined the UK housing market. Lenders have continued to raise mortgage rates, leaving buyers and homeowners struggling with costs – FT
• [United Kingdom] UK housing market strains grow as mortgage rates creep higher – Reuters
• [United Kingdom] ‘This is just ruinous’: the Britons unable to afford their homes. Millions are finding themselves priced out of renting and buying amid high inflation and mortgage rates – The Guardian
• [United Kingdom] Find out where you can afford to buy or rent in Great Britain. In nearly half of postcode districts the typical household cannot afford to buy a home, while in others a sustainable rent is also out of reach. Use the map below to see where is affordable for you – The Guardian
• [United Kingdom] Summer Rate Hikes Threaten to Push UK Housing Market to Breaking Point. Inflation and the BOE are increasing strains on the market – Bloomberg
• [United Kingdom] Rishi Sunak under pressure as HSBC raises mortgage rates for second time in week. Brokers warn that other lenders will follow suit in blow to households – FT

On cross-country:

• (Can) cities save the world!? Brussels Urban Summit 2023 – Euro Cities
• Global housing outlook brightens despite pressure from higher rates – Reuters poll – Reuters
• Amoral cities are flourishing in a turbulent geopolitical era. Our index ranks economic performance over the past three years – The Economist

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

• Housing Market Update: Mortgage Rates Are Up, Home Sales Are Down, Prices Are Resilient – Redfin
• Could 6% to 7% 30-Year Mortgage Rates be the “New Normal”? – Calculated Risk
• Year-over-year Rent Growth Continues to Decelerate. Asking Rents Likely to be Down year-over-year in June or July – Calculated Risk
• Black Knight Mortgage Monitor: Home Prices Increased Month-to-month in April; Prices Unchanged YoY. Credit Tightening: “April purchase credit scores were the highest on record” – Calculated Risk

On the US—other developments:    

• Hidden Costs of Homeownership Can Add Up to Nearly $15,000 Annually – Zillow
• The Housing Supply is Tight. How About a Texas Ghost Town for $100,000? There’s a catch—the buyer has to have a plan. ‘Do you respect what I call the soul of Lobo?’ People are flocking to the outpost to present their ideas – Wall Street Journal
• Covid Housing Relief, Forever. The FHA wants to cover mortgage arrears that it helped to cause. – Wall Street Journal
• Early Look at Local Housing Markets in May. Early Reporting Markets Suggest Sales Down Less YoY in May than in April NSA – Calculated Risk 
• Housing Affordability Posts Solid Gain but Still Much Lower from a Year Ago – NAHB

On other countries:  

• [Australia] Australia UK House Prices Are Falling Again — And There’s More Pain Ahead. Consumer budgets squeezed by inflation and interest rates. Outlook poses a danger for Rishi Sunak before next election – Blomberg
• [United Kingdom] British home prices to slip but won’t come crashing down, Reuters poll shows – Reuters
• [United Kingdom] UK house prices book first annual contraction in a decade. Property prices down 1% last month compared with May 2022, the first annual fall since December 2012 – FT