Chart of the week
U.S. real estate statistics show a significant slowdown in sales. The number of transactions involving existing homes has been fluctuating between 6 and 6.5 million per year since mid-2020, a rather high level but below the highs reached at the peak of the real estate bubble in the 2000s. Since last October, the number of compromises has fallen by 15%, but prices continue to significantly increase: in January, they jumped by 1.8%, bringing the year-on-year increase to 19.1%.*
The main cause of this situation is the very low level of number of homes to be sold. In fact, for the past few months, the number has fallen below the one-million mark.
The U.S. housing market is marked by a very high imbalance between housing supply and demand. This is not simply a matter of lack of new listings, since the housing vacancy rate is at its lowest level since it was first calculated in 1960.
This context therefore justifies the very good dynamics of residential construction, with building permits returning to the high points of previous cycles. The recent rise in mortgage rates may put a slight damper on this momentum, but it is based on solid fundamentals.
The opinion expressed above is dated April 1, 2022 and is subject to change
*Sources : Bloomberg and calculation from Lazard Frères Gestion
As of : April 1, 2022
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