The Unassuming Economist

From the IMF’s latest report on Belgium:

“Cooling of the housing market, which has been characterized by elevated prices, calls for heightened vigilance and release of buffers, if needed. Although valuations are not as stretched as elsewhere in Europe, model-based estimates point to some overvaluation. Bank mortgage exposures are relatively high, and debt-service-to-income ratios are somewhat elevated. Risks are mitigated by prevalence of mortgages with full-recourse provisions that amortize fully over the maturity of the loan and by a high share of fixed-rate and longer-term (>15 years) loans. A sectoral systemic risk buffer (SSyRB) against housing-related exposures introduced in May 2022 and tighter LTV limits imposed by prudential guidelines since 2020 provide additional comfort. Moreover, aggregate liquid assets of households exceed mortgage debt (…), potentially cushioning the impact of deteriorating income prospects on debt servicing capacity. Still, the recent slowdown of house-price momentum, potentially heralding a sharper market turn, deserves careful monitoring and SSyRB deployment, if needed. Despite limited use, strict eligibility criteria, and adequate provisioning, reactivating mortgage moratoria for October 2022-March 2023 to cushion energy-crisis impacts was inappropriate, as it may delay timely bank-borrower engagement to address debt-servicing challenges. NBB efforts to gather housing stock energy efficiency information to allow for better assessment of collateral values and risks are welcome and should continue, particularly given emerging stratification of house prices based on sustainability considerations.”

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

• Home Prices Are Overvalued but Will Decline Only Gradually – Kansas City Fed
• The housing market correction has already caused homeowners to lose $2.3 trillion – Fortune
• The housing market correction just took a new turn – Fortune
• As the Decade Long Home Price Boom Ends and a Major Home Price Correction Begins, the Impact Will Vary as Metro Areas Are Buffeted by a Variety of Headwinds and Tailwinds – AEI
• Has Housing Bottomed? – Seeking Alpha
• The value of US homes recorded its biggest six-month drop since 2008. The Bay Area saw the biggest fall, but the market is hot in flood-prone Florida – Quartz
• First time ever more “Built-for-Rent” Units started Quarterly than “Built-for-Sale” – Calculated Risk
• Multifamily Built-for-Rent Share Rises – NAHB
• CoreLogic: “US Annual Rent Price Growth Dropped by Nearly Half in December” – Calculated Risk
• Another Pointless Government Mortgage Pricing War Begins – AEI
• The Normal Seasonal Changes for Median House Prices – Calculated Risk
• Biden Administration to Cut Mortgage ​​Insurance Costs for Lower-Income Buyers – Wall Street Journal

On the US—other developments:    

• The State of US Housing: A Roller Coaster Ride – Harvard Joint Center for Housing Studies
• How the Housing Shortage Warps American Life. Atlantic writers explain why a lack of housing makes everything worse. – The Atlantic
• Additional Declines for New Home Size – NAHB
• NAR: Existing-Home Sales Decreased to 4.00 million SAAR in January – Calculated Risk
• Existing Home Sales Continue to Fall in January – NAHB
• What Do US Growth Zones Have in Common? They Build Housing – Washington Post
• Congress Could Have Prevented 500,000 Foreclosures During The Great Recession But Chickened Out – Real Estate Decoded
• Final Look at Local Housing Markets in January. Year-over-Year: Sales Down Sharply, Inventory Increased, New Listings Down – Calculated Risk
• Missing Middle Housing Production Lags – NAHB

On China:

• Global Impact: China turns up the heat on its property sector as economy slowly rebuilds – South China Morning Post
• Chinese cities cut mortgage rates for first-time buyers to lowest since 2019 in bid to revive property market – South China Morning Post

On other countries:  

• [Australia] Australia’s housing crisis: how RBA interest rate hikes are pushing families closer to the edge – The Guardian
• [Portugal] Portugal Wants to Force Owners of Vacant Homes to Find Tenants. Move is intended to ease tensions in a tight housing market. Property owners’ group calls proposed measure unconstitutional – Bloomberg
• [Singapore] Singapore’s soaring expat rents undermine bid to oust Hong Kong as finance hub. Rising living costs damage city-state’s ambition to lure regional businesses – FT
• [South Korea] South Korea’s ‘jeonse’ rent-free renters hit by property downturn – Reuters
• [Switzerland] How Does Immigration Affect Housing Costs in Switzerland? – IZA Institute of Labor Economics
• [United Kingdom] UK property asking prices show weakest February gain on record: Rightmove – Reuters
• [United Kingdom] Britain Lacks Millions of Homes Due to Tight Planning Laws, Says Think Tank – Bloomberg
• [United Kingdom] UK’s Long Housing Boom Helped Trigger Exodus of Older Workers – Bloomberg
• [United Kingdom] Is a frozen market worse than a house price crash? UK housing downturns tend to live long in the memory, but a period of stagnation could be even more painful – FT

Presented at IHA Global Meetings 2023.

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

• Housing Slump Set to Give Fed an Inflation-Fighting Assist. A slowdown in new household growth could ease prices and rents, but rising wages cause worry – Wall Street Journal
• Inflation Adjusted House Prices 3.8% Below Peak. Houses are the least “affordable” since 1982 when 30-year mortgage rates were over 14% – Calculated Risk
• Lawler: Update on Rent Trends. And an Update on New Cleveland Fed Rent Paper – Calculated Risk
• US House Prices by Census Division: Persistence, Trends and Structural Breaks – IDEAS
• Mortgages are still confusing… and it matters – How borrower attributes and mortgage shopping behavior impact costs – Fannie Mae
• Case-Shiller: National House Price Index “Continued to Decline” to 9.2% year-over-year increase in October. FHFA: “House prices were flat nationwide in October, experiencing a 0.0 percent change from the previous month” – Calculated Risk
• Home Prices Fell in October for Fourth Straight Month. A jump in mortgage rates is curbing demand, with many economists expecting prices to continue sliding from their spring peaks – Wall Street Journal
• Double-digit U.S. home price growth streak skids to an end – Reuters

On the US—other developments:    

• The 2022 housing market: A tale of two halves. Less rate-dependent mortgage products, home equity loans, HELOCs were the name of the game in 2022 as the industry shrank – Housing Wire
• New Home Sales Increased in November; Previous 3 Months Revised Down Sharply. New Home Sales Increase to 640,000 Annual Rate in November – Calculated Risk
• November New Home Sales Up as Interest Rates Fall Back – NAHB
• Multifamily Construction Continues to Expand Outside Metro Core Areas – NAHB
• What Would It Take to Turn More Offices Into Housing? Vast amounts of empty real estate are a crisis for building owners. But some politicians and business leaders hope they can be converted into something new — and transform downtown neighborhoods. – New York Times
• Our Top 10 blogs of 2022 – Harvard Joint Center for Housing Studies
• Top Posts of 2022: Housing Market at Inflection Point as Builder Confidence Continues to Fall – NAHB
• Final Look at Local Housing Markets in November. Year-over-Year: Sales Down Sharply, Inventory Increased, New Listings Down – Calculated Risk
• Existing Low-Rate Mortgages Blunt Impact of Recent Rate Surge – Dallas Fed
• Two Graphs Give Insight Into The Housing Market Present And Future – Seeking Alpha

On other countries:  

• [Australia] IMF sees potential for imminent ‘sizeable’ bust in Australia’s housing market. Report warns homes keep getting less affordable, and Australia has one of the highest rates of people spending more than 40% of their income on housing – The Guardian
• [Hong Kong] Hong Kong’s Tiniest Apartments Take Biggest Hit in Housing Slump. Nano-flat sales struggle most as buyers opt for bigger options. Developers only able to sell 48% of studio units in 11 months – Bloomberg
• [India] India’s Upscale Housing Market Strengthens, Defying Global Trend. Affluent Indians who throttled back on spending during the pandemic are returning to the country’s housing market in force – Wall Street Journal
• [Ireland] Irish property: the boom that shows no signs of slowing. While other markets cool off, Ireland is facing a housing shortage that is driving up the cost of renting and buying – FT
• [Latvia] Latvia’s high inflation gives an illusion that house prices are still rising – Global Property Guide
• [Mexico] As Remote Workers Flock to Mexico City, Airbnb and Housing Prices Soar. American and Europeans are using Airbnb to find long-term rentals in Mexico’s capital, pushing housing costs higher and, critics say, forcing out local residents. – New York Times
• [Singapore] Singapore Rents Forecast to Rise at Slower Pace Next Year. Private rents could rise 13% to 16% next year, researcher says. Influx of new private homes could ease rental pressure – Bloomberg
• [Singapore] Singapore’s house prices rising, despite falling demand – Global Property Guide
• [United Arab Emirates] New generation of rich spur boom in Dubai’s luxurious homes market. Demand soars since pandemic, with owners inundated with requests to sell homes with swimming pools and terraces – FT
• [United Kingdom] Experts predict housing market will cool in 2023 as UK enters a recession. The slowdown is expected to intensify with price declines between 5% and 12% – The Guardian
• [United Kingdom] UK banks to ease pressure on mortgage holders as late payments set to surge. Some measures could include switching borrowers to interest-only deals – FT

On cross-country:

• Conference: Alternative technics on housing and construction during Covid – REFINE

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

• Mortgage Buydowns Are Making a Comeback. Soaring rates have revived interest in a product that fell out of favor after the financial crisis – Wall Street Journal
• Higher mortgage rates depress U.S. single-family housing starts, building permits – Reuters
• Single-Family Permits Continues On A Downward Trend in October 2022 – NAHB
• US Housing Starts, Permits Fall on Slide in Single-Family Homes. Total new construction slips 0.5%, marking third-straight drop. Permit applications for one-family homes lowest since May 2020 – Bloomberg
• In US housing market, homebuilders are wary of starting new projects. Permits to build new houses fell by double digits in November. – Quartz
• Prepare for US house prices to slump, unemployment to spike, and a recession to set in, Harvard economist Kenneth Rogoff says – Markets Insider
• The Normal Seasonal Pattern for Median House Prices – Calculated Risk
• 3rd Look at Local Housing Markets in November. “Median home prices in the Austin-Round Rock MSA experienced a 0% year over year increase” – Calculated Risk
• 10 facts about U.S. renters during the pandemic – Pew Research Center
• Lawler: Early Read on Existing Home Sales in November. Another Step Down for Sales in November – Calculated Risk
• 4th Look at Local Housing Markets in November; California Sales off 48% YoY. Another step down in sales in November – Calculated Risk 
• Existing Home Sales Decline Further in November – NAHB
• NAR: Existing-Home Sales Decreased to 4.09 million SAAR in November. Median Prices Down 10.4% from Peak in June 2022 – Calculated Risk 
• Existing-Home Sales Dipped 7.7% in November – NAR

On the US—other developments:    

• Why This Housing Downturn Isn’t Like the Last One. A postcrisis mortgage-market makeover and an overhaul of the financial system make a repeat of 2008 unlikely – Wall Street Journal
• Homing in on a Housing Recovery. After a miserable year for housing, some reasons for optimism – Wall Street Journal
• The Push of Big City Prices and the Pull of Small Town Amenities – Philadelphia Fed
• Where Are the Most and Least Affordable Homes? A new study compares median home prices against household income, property taxes and mortgage expenses to determine affordability. – New York Times
• Americans Want More Affordable Housing — Just Not Nearby – Five Thirty Eight
• The Size of the Housing Shortage: 2021 Data – NAHB
• In the US, Owning a Home May Not Lead to a Better Life – Insead
• Biden Administration Calls for 25% Cut in Homelessness by 2025. The Biden administration’s new strategic plan to address homelessness includes a focus on equity and a promise to help cities build more housing. – Bloomberg
• America’s Housing Shortage Crisis, in Two Maps. Chronic NIMBYism has left America’s population centers without enough places to live. – Bloomberg 
• The Homeownership Society Was a Mistake. Real estate should be treated as consumption, not investment. – The Atlantic
• Housing Sentiment in the Fourth Quarter of 2022 – Freddie Mac  
• Nine Percent of New Homes Are Teardowns – NAHB
• Eviction and Poverty in American Cities – Philadelphia Fed
• Evictions in New England and the Impact of Public Policy during the COVID-19 Pandemic – Boston Fed

On China:

• China mulls new measures to support real estate sector – vice premier – Reuters
• China To Correct Past ‘Mistaken’ Housing Policies: Top Economist. Government is changing tone on the property sector: Yao Yang. 2021 policies to curb the sector were ‘mistaken,’ he says – Bloomberg

On other countries:  

• [Australia] The Stench of Failure: How Perception Affects House Prices – NBER
• [Australia] Australia’s housing crisis, largely hidden, is getting worse – Reuters
• [Canada] Cities have to expand for house prices to fall – New Geography
• [Israel] House prices keep soaring, marking record 20.3% rise in a year. Dramatic figure comes as other inflationary pressures ease, with consumer prices rising more slowly – The Times of Israel
• [Sweden] Sweden’s Housing Market Seeks Bottom as Price Drop Continues. HOX index shows decline continued for eighth month in a row. Price drop of 15% from the peak also seen in other recent data – Bloomberg
• [United Kingdom] How UK House Prices Could Fall by 30%. There’s plenty of precedent for a steep decline in ‘real’ values. – Bloomberg
• [United Kingdom] UK house prices expected to fall by 8% next year, says Halifax. Lender says market rebalancing after years of growth, as mortgage rates and cost of living push prices down – The Guardian
• [United Kingdom] Debt charities warn over surging mortgage costs for millions of borrowers. Concerns mount after Bank of England increases interest rates to 3.5 per cent – FT
• [United Kingdom] UK mortgage guarantee scheme extended by a year. Ministers delay closure to help first-time buyers facing high interest rates and fewer borrowing options – FT
• [United Kingdom] House prices in central London fell by a quarter over five years. Expensive areas, hardest hit in real terms, will feel the effects of high mortgage rates in 2023 – FT