The real estate market in the United States is facing challenges, with rising interest rates, inflation, and the potential for a recession leading to record-high prices for both home purchase and rental housing. The demand for homes is outstripping the available supply, resulting in an unusual situation where the number of real estate agents in the US is now greater than the number of single-family homes available for sale.
Recent data shared by The Kobeissi Letter, a prominent analyst of global capital markets, underscores the crisis in the US real estate market. The average cost of buying a house has reached an all-time high of $2,748 per month, marking a staggering 90% increase since 2020. On an annual scale, this translates to nearly $33,000.
These figures are concerning when considering the average income levels in the US. The annual expense of housing constitutes 46% of the median annual pre-tax income and around 70% of post-tax income for homeowners. Rental costs have also surged, reaching an all-time high of $1,859 per month, equating to just over $22,000 annually.
The driving factors behind these high prices include the monetary policies of the US central bank and the current mortgage rates, which are the highest seen in two decades. The record $1 trillion credit card debt is also contributing to the situation, with increasing debt interest rates further exacerbating the issue.
The supply of single-family homes is dwindling, and homeowners are reluctant to sell their properties due to stable mortgage interest rates. This has led to a dynamic increase in housing prices and costs. Additionally, there are currently more registered real estate agents in the US market than available single-family homes, highlighting the growing disparity between supply and demand.
The impact of these factors on the US housing market is raising concerns about affordability and access to housing for many Americans. As the supply-demand imbalance persists, addressing the housing crisis will require careful economic management and policy adjustments to ensure sustainable solutions.
