WHAT SINGLE-FAMILY HOUSING MARKET TRENDS MEAN FOR CRE?
Elevated Mortgage Rate Restrains Home Sales
- Single-family mortgage rates have climbed to the 8% range, reducing home sales to lowest level in over a decade
- Elevated home prices have significantly reduced housing affordability
Impact is Bigger Than Just Housing Markets
- Home sales historically comprised an average of 4.5% of U.S. GDP, a significant amount nationally
- Home sales affect multifamily, retail, self-storage and industrial properties in unique ways
What This Means For Investors
- Affordability gap between owning and renting has surged to a new peak
- Dramatically higher home prices and mortgage rates are likely to support multifamily demand
- A home sales revival will require a substantive reduction of interest rates – much will depend on the Federal Reserve, Quantitative Tightening and Federal Treasury Issuance.
Sources: Marcus & Millichap Research Services, National Association of Realtors
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