class: center, middle, inverse, title-slide # Housing Market Update ## Recent housing market trends ### Len Kiefer ### 2017/02/04 --- class: left, top ### Mortgage rates low by historical standards .left-column[ Rates remain quite low by historical standards Rates have been on a 30+ year secular decline ] .right-column[ <!-- --> ] --- ### But rising since November .left-column[ Mortgage rates drifted down for most of 2016. Following the U.S. election, rates headed higher. ] .right-column[ <!-- --> ] --- class: inverse, center, middle ### What might rising rates mean for housing? --- ### Home sales best in a decade .left-column[ Low rates helped support home sales. In 2016, existing home sales reached their highest level since 2006. ] .right-column[ <!-- --> ] --- ### Home sales best in a decade .left-column[ New home sales also improved in 2016, but the level of sales is well below historical averages. ] .right-column[ <!-- --> ] --- ### Housing supply not keeping up with demand .left-column[ Housing starts are running well below historical averages. To meet long-run demand, the economy needs to add about 1.7 million additional housing units each year. We're only seeing about 2/3 that level. ] .right-column[ <!-- --> ] --- class: inverse, center, middle ### Low supply relative to demand is fueling price increases --- ### House prices rising well above inflation .left-column[ Strong demand and limited supply result in house prices increasing about 6 percent on a year-over-year basis across the U.S. ] .right-column[ <!-- --> ]