patrick.net

Demographics will give us housing "demand" for years to come. Rent price increase is bullish for housing price. For sales of supply home is way too low against demographic trends.

-Causation
-Correlation
-Representation

Why has housing demand from main street America and first time home buyers been so weak for the past few years with interest rates below 5% since 2011

- Capacity to own is light
- Capacity to rent is strong

We have a very strong rental recovery and rental construction cycle but a very soft mortgage demand cycle

Starts are still growing, just not as fast as some people have predicted

Rental inflation has been strong and is the only item holding CPI inflation up these days

You're not getting help from SFR residential sector since it's the most expensive housing product ever recorded in American history

Looking long term, there are going to be a lot Americans that will need to rent as age 23,24,25 is the biggest age group on record and they will be renting for longer than their previous generation age group

Builders see the same numbers on demographics as everyone else. They have a profit margin discipline to work with

starts have been going up, as it should. Buying will lag the rental demand in timing. Don't make it more complicated than it is. Your 23 year old renter today will be a 30 year old buyer.

anonymous says

California or anywhere else unless there are two of them and they have very decent paying jobs.

Yeah, this is interesting to me. The two of us get paid twice the median of LA county (for whatever that statistic is worth), and every year we get close to a 20% DP, the house prices rise another 7-10%. We've been here 8 years now and have built up so much cash that we don't even want to dump it in a house at this point--or just buy outright when we are ready to leave CA. Of course, then there is the issue that you really need 30%, 50%, or all cash to compete on anything within reach in LA, and that's likely true for a lot of job-hub cities given the inventory shortage.

SFace says

starts have been going up, as it should. Buying will lag the rental demand in timing. Don't make it more complicated than it is. Your 23 year old renter today will be a 30 year old buyer.

Then why aren't the 29-33 buying now? with 3.75% Rates because in the later years of the economic cycle they have been trending negative not even on par

Unless purchase applications grow soon even I am going to blow this call as I said we could get at least 5%-10% growth at it's be really flat all year long

Working off a 21st century low set in 2014 in year 7 of the economic cycle, this is dreadful

We have roughly 40 million more Americans from 2000 and 16 million more working Americans from 2000 and in year 7 of this economic cycle with 3.75% rates it can't even muster a positive trend line number