U.S. house prices to rise at twice the speed of inflation and pay: Reuters poll

[DonViejo]

Source: Reuters



JUNE 6, 2018 / 1:48 AM / UPDATED 41 MINUTES AGO

Hari Kishan, Rahul Karunakar

(Reuters) - An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.

After losing over a third of their value a decade ago, which led to the financial crisis and a deep recession, U.S. house prices have regained those losses - led by a robust labor market that has fueled a pickup in economic activity and housing demand. But supply has not been able to keep up with rising demand, making homeownership less affordable.

Annual average earnings growth has remained below 3 percent even as house price rises have averaged more than 5 percent over the last few years.

The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.




Read more: https://www.reuters.com/article/us-usa-property-poll/u-s-house-prices-to-rise-at-twice-the-speed-of-inflation-and-pay-reuters-poll-idUSKCN1J20G3?il=0

[marble falls]

1. Wooo Hoooo the "Great Trump Real Estate Bubble" has such a nice ring to it.

[dembotoz]

2. have a kid who still lives with me. we get along but he wants to be on his own. rents are absurd

anticipate he will be gone soon.

new units are being build but they all have the luxury designation.
the latest about a 1/2 mile from me literally right next to the train tracks.
Every night @ 2 am like clockwork a rather loud freight train waddles thru....
some nights i can hear it...a half mile away...yah that sounds like luxury to me.....
its also across the street from the local bar bowling alley where the town drunks hang out.
It should have been zoned light industrial but alas...money talks

[IronLionZion]

3. Location based

People are moving back to the cities, which increases rents and prices in the cities.

It's quite the opposite situation in the areas that are losing population. Since many jobs are in the cities, people who can't afford the housing near their homes are having longer commutes and millennials are often living with parents for a very long time even with good jobs.

And most new apartment construction looks to be the luxury type that gets investment capital, and occasionally low income housing that gets tax breaks. Who is building middle class apartments these days?

If someone's job is located in the suburbs and they will be working there for multiple years, then they could probably get away with living in an affordable area far outside of a city. But people work in different places and in shorter durations like for contract work, making that a logistical impossibility that leads to multi-hour commutes.