What’s Different about the Latest Housing Boom?

[NewsParticipant]

November 16, 2015
What’s Different about the Latest Housing Boom?
Reuven Glick, Kevin J. Lansing, and Daniel Molitor

After peaking in 2006, the median U.S. house price fell about 30%, finally hitting bottom in late 2011. Since then, house prices have rebounded strongly and are nearly back to the pre-recession peak. However, conditions in the latest boom appear far less precarious than those in the previous episode. The current run-up exhibits a less-pronounced increase in the house price-to-rent ratio and an outright decline in the household mortgage debt-to-income ratio—a pattern that is not suggestive of a credit-fueled bubble.

READ MORE: http://www.frbsf.org/economic-research/publications/economic-letter/2015/november/what-is-different-about-latest-housing-boom-mortgage-debt-ratio/

[PosoleParticipant]

It’s mostly rental housing. Because everyone is still stinging from the mortgage foreclosures.

[Walker EvansKeymaster]

Posole wrote:

Because everyone is still stinging from the mortgage foreclosures.

That, plus the fact that the two current biggest generational demographics (Millennials + Boomers) are both looking for rentals rather than mortgages right now anyway, prior foreclosure issues or not.

[pedexParticipant]

that and it is almost 100% backed/underwritten by the GSE’s and almost zero private lending

and the GSE’s recently warned they will need more $$

[dermParticipant]

That plus a significant number of purchases in the last few years to generate the rentals were cash purchases, no mortgage, from large holding companies.

[Author]

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