Consumer Resiliency Remains Challenged by Formidable Housing Costs

Jul 25, 2023 | Macro Insights, No Bull Economics

Housing Costs Post Banner

Perhaps insufficient attention is paid to the impact of exorbitant housing costs on consumer spending trends. While this is not an issue for those that purchased their homes before the rate hikes, it has a big impact on renters & first-time home buyers who are left with less in their wallets.    

Commentary

  • Some consumers, but not all, are squeezed by record-high new homebuyer housing payments and rent hikes which are aggravated by increasing demand from renters that would ordinarily purchase new houses.
Homebuyer Housing Payments Graph
  • As owners of existing homes who currently enjoy low monthly payments are unwilling to list their houses for sale, new listings are down -25% y/y thus driving the average selling price for home sales out of reach.   
New Listings and Median Home Sales Graph

Source: https://www.redfin.com/news/housing-market-update-home-prices-climb-low-supply/

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