Let us take a look at house price trends in the United States and across states and metro areas.
Earlier this week I tweeted out a few charts on housing market trends.
In most of the middle part of the country over the past 44 years there has been little growth in real (inflation-adjusted) house prices.
In coastal states, a very different story. pic.twitter.com/PLbiNftha3
— 📈 Len Kiefer 📊 (@lenkiefer) July 10, 2019 In this post we’ll analyze real house prices since 1975, and per usual use R to wrangle data and make plots.
I try not to use too much jargon (jargon monoxide can be deadly) on this blog. But I’ve got a bit of a technical term I’ve been using the describe U.S. residential construction: super-low.
To be sure, housing construction has been grinding higher, but it’s been taking a while for activity to get back close to historical averages. Once you account for the larger population, which all else equal needs more housing units, the level of construction is quite low.
EARLIER THIS WEEK I TWEETED out a poll asking whether or not folks wanted to see a thread/tweetstorm with slides from an upcoming presentation on the economy and housing markets that I’m giving. Over 90 percent voted for a thread. So I shared it. In this post let me add a little more commentary on the individual slides.
Here’s the thread I ended up posting:
Thread (0/5). I'm giving an update on economy, #housing and #mortgage market trends.
EARLIER TODAY THE U.S. CENSUS BUREAU released new estimates of population for U.S. states from 2010 through 2017. Let’s see how population trends look compared to recent house price growth.
We’ll combine the Census estimates for state population with the Freddie Mac House Price Index.
The chart below plots population growth rates by state from July of 2010 to July of 2017 against house price appreciation rates over that same period.
LET US REVIEW HOUSING MARKET TRENDS in the United States through the first three quarters of 2017.
Economic background
The overall economic environment remains favorable for housing. Interest rates are low, the labor market has been solid and income growth, while modest, has begun to tick up.
Low mortgage rates
For most of 2017 mortgage rates have declined. Rates entered the year above 4 percent for the 30-year fixed rate mortgage, but after peaking in March, declined through September.
I AM WORKING ON ADDING some more analysis around mortgage origination trends (see here for a high level summary).
It’s on the way, but let me just leave a few graphs for you. These are updated versions of the same ones we made last year.
These infographics show the distribution of mortgage loan amounts by state/county and metro area.
For the beeswarm plots (see for example, Flowing Data) plots I have randomly sampled 2,000 loans from each state/metro area.
IT IS SEPTEMBER AND THAT MEANS it is data release season. One of the most important September data releases for me is the annual HMDA data release.
These data provide the closest thing to a publicly-available comprehensive summary of U.S. mortgage market activity that we’ll get (for right now). The recently released data is for 2016 and provides a detailed view of mortgage market activity across the country. Let’s take a look.
NEW HOME SALES FALL according to the latest new residential sales report from the U.S. Census Bureau and Department of Housing and Urban Development (HUD).
errr probably.
Remember, housing data is uncertain and there’s quite a large margin of error. Per the Census/HUD report sales fell 3.4 percent, but with a confidence interval of plus or minus 13 percent. Here’s a chart with the line showing the estimate and the shaded area the confidence interval around that estimate.
ARE HOUSING STARTS GRINDING HIGHER, OR GRINDING TO A HALT?
Today the U.S. Census Bureau joint with the U.S. Department of Housing and Urban Development published updated estimates of housing starts through August of 2017. Per the report privately-owned housing starts in August were at a seasonally adjusted annual rate of 1.18 million, down 0.8 percent from July’s revised estimate and up 1.4 percent from a year ago. Neither the month-over-month or year-over-year changes were significant.
LET US REVIEW SOME INTERESTING TRENDS IN HOUSING VACANCIES for the United States.
Earlier this year we talked about how limited housing supply was helping to drive accelerating house prices across the country. In such an environment you would expect to see housing vacancies decline. Indeed, if you look at the rate of rental or homeowner vacancies you see a substantial reduction.
The chart below shows the homeowner and rental vacancy rates reported by the U.