Marketwatch published a piece reviewing housing in America. The current status?
Fewer Americans are home-owners versus when the study was first published in 1988. That says a lot about the current state of housing in America. Nearly one-third of American households, or 38.1 million, paid more than 30% of their incomes for housing in 2016, making them “cost-burdened.”
It has particularly been a hard on youth, no longer able to move out of the nest. In general, Americans are also staying in one place for longer as they are reluctant to move.
Remember that price ratio chart at the top of the page. I’ll leave you with this nice GIF of how that chart looks over time.
US Growth Peaking
Recent data has shown a large drop in new construction permits, manufacturing is cooling due to oil prices and tariffs, and the housing market hasn’t grown as fast as in previous quarters. NREI says on housing:
While groundbreaking on homes jumped to the strongest in more than a decade, it was largely due to a surge in the Midwest and helped by conducive weather. Permits — a proxy for future construction — fell for a second month.
What does it all mean? We’re past the US’s 10th straight year of expansion, so we’d naturally expect some ‘cooling off.’ Trade concerns seem to be the biggest issue for economists. Our trade relationship with China is a high risk factor that could not only affect our trade economy, but could potentially impact foreign investment from China in the US housing market.