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Hey Newark, Irvington, Orange, and East Orange How Inflation Affects the Housing Market Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two. The Relationship Between Housing Inflation and Overall Inflation Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if...

A concise read that clearly explains what is happening/impacting the housing market - definitely worth the read! #intownrealestate #kwintown https://lnkd.in/d-yge_bq

Exciting news from the housing market front! 🏡 A recent report by Freddie Mac economists has shed light on the current housing shortage across the United States. While the numbers may seem daunting, it's an opportunity for growth and positive change. 🌟 According to the report, the U.S. housing market is short at least 1.5 million units, with a need for an additional 760,000 for-sale homes and 760,000 rental units to achieve a balanced market. This deficit highlights the increasing demand for housing and the potential for investment and development in this sector. 💰 Freddie Mac economists suggest that addressing this shortage could alleviate the pressure on housing markets nationwide. And who knows, their estimate might even be on the conservative side, leaving room for even more exciting prospects! 📈 It's a challenge, but also a chance to innovate and create sustainable housing solutions for communities across the country. The road ahead may be winding, but the destination is worth it – a nation with ample housing for all. 🏘️ 🗣️💡 Sign up for our weekly newsletter to stay ahead in the game: https://lnkd.in/gBd74ae8 #RealEstateInvesting #MultifamilyMarket #AppelmanCapital #OhioRealEstate #PropertyTaxes #HousingMarket #MortgageRates #FinancialInsights

The Housing Shortage Will Only Get Worse—Here’s What Investors Need to Know There are many reasons property values have ballooned over the last decade: favorable demographics, monetary policy (low interest rates), stimulus, and migration patterns, just to name a few. But one of the most powerful and enduring variables that has pushed up pricing over the last decade is a shortage of housing units. Estimates vary on the size of this shortage, but they generally vary from about 1.5 million to 7 million units. And according to Realtor.com, the shortage is actually getting worse. A Look Back To truly understand the housing shortage, we need to look back to the lead-up to the great financial crisis and its ensuing fallout. As seen in the graph, housing starts (new construction projects begun) accelerated in the housing bubble era of 2000-2007, then promptly fell off a cliff. Housing construction did bottom in 2009, but it took until 2020 for construction levels to return to where they were in the “normal” 1990s. There are several reasons why this recovery was so slow, but the primary reason is that many construction companies closed up shop when housing prices crashed—and it takes a while for an industry to recover from such an event. Of course, construction continued during this recovery, and according to Realtor.com, an estimated 13.4 million units were built from 2012 to 2023. Of those, 9.5 million were single-family homes, and 3.9 million were multifamily units. Although this may sound like a lot of units, this number needs to be considered in the context of rising demand. In the housing market, the best way to measure macro-level demand is through a metric called household formation. A household in this context is any independent person or group of people who live on their own. So a family living together is a household. A group of unrelated roommates living together is a household. An individual living alone, also a household. Thus, to understand how demand for housing is changing, we need to see how many new households are formed (or dissolved). From 2012 to 2023, 17.2 million households were formed. This means that even though 13.4 million housing units were constructed, there was a deficit of nearly 3.8 million units, according to Realtor.com’s research. If we zoom in to just the last year, we can see that this problem is not improving. In 2023, 1.5 million units were completed, but 1.7 million households formed, growing the deficit by 200,000 units. Implications of the Trend  This has big implications for investors and the broader housing market: A housing shortage will provide sustained upward pressure on housing prices. To me, this seems clear, but I want to offer two caveats. 

Housing starts in the US fell 5.5% to an annualized rate of 1.277 million in May 2024, the lowest since July 2020, from April's downwardly revised 1.352 million and well below the forecast of 1.37 million. This unexpected decline shows that high interest rates started to weigh again on the housing market. Single-family housing starts fell 5.2% to 982K, the lowest since October. Starts for units in buildings with five units or more plunged 10.3% to 278K, a two-month low. Starts sank 19% to 149K in the Midwest; fell 8.5% to 733K in the South and declined 2.5% to 77K in the Northeast. On the other hand, starts in the West soared 10.4% to 318K.

🏡 Monday Morning Outlook: Housing Update 🏡 This morning, we received two key reports on home prices: one from the Case-Shiller index and another from the FHFA. Both reports show a rise in housing prices for March, with annual increases of 6.5% and 6.8%, respectively. Key Highlights: -> Price Gains: Expect continued, but slower, price gains. Unlike the 2008–09 bubble, we're seeing more stable growth. -> Significant Increases: Since pre-COVID (February 2020), the Case-Shiller index is up 47.4% and the FHFA index is up 50.2%. -> Rising Costs: The price index for constructing new single-family homes is up 37.9% due to higher commodity and labor costs. -> Underbuilding: Homebuilders have not kept pace with demand, a trend that started after the housing bubble. -> Regulatory Challenges: Federal, state, and local regulations make new home construction more difficult and expensive. -> Increased Construction Time: The average time from permit to start for single-family homes increased from 1.1 months pre-COVID to 1.5 months in 2023. -> Longer Completion Times: Finishing a home now takes 8.6 months for single-family homes, compared to 7.0 months pre-COVID. With government policies limiting home construction and a surge in immigration, a free market in housing is more essential than ever. Although housing prices may rise more slowly and sales may slow during a recession, the housing market is likely to remain resilient due to underbuilding. READ MORE >> https://lnkd.in/gr6S38nt #HousingMarket #RealEstate #MarketUpdate #HomePrices #EconomicOutlook #ConstructionChallenges #Regulations #MondayMorning

Take a look at this... How Inflation Affects the Housing Market Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two. The Relationship Between Housing Inflation and Overall Inflation Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d rent their homes for, if... Time To Buy or Sell-Call Me

How Inflation Affects the Housing Market Have you ever wondered how inflation impacts the housing market? Believe it or not, they’re connected. Whenever there are changes to one, both are affected. Here’s a high-level overview of the connection between the two. The Relationship Between Housing Inflation and Overall Inflation Shelter inflation is the measure of price growth specific to housing. It comes from a survey of renters and homeowners that’s done by the Bureau of Labor Statistics (BLS). The survey asks renters how much they’re paying in rent, and homeowners how much they’d... Lauren Friedman REALTOR® DRE 01898581at Keller Williams Pacific Estates

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The executive summary of The State of the Nation’s Housing report from Harvard Joint Center for Housing Studies goes right to the heart of the current crisis in the U.S.: “Millions of households are now priced out of homeownership, increasing the need for policies to address the national housing shortfall at the root of the affordability crisis.” Learn more in the full report. #CostOfHome https://lnkd.in/em5xsRhi