How Does the Housing Market Impact CRE

Written By Christian Desnoes

WHAT SINGLE-FAMILY HOUSING MARKET TRENDS MEAN FOR CRE​?​

Elevated Mortgage Rate Restrains Home Sales​

  • Single-family mortgage rates have climbed to the 8% range, reducing home sales to lowest level in over a decade​

  • Elevated home prices have significantly reduced housing affordability​

Impact is Bigger Than Just Housing Markets​

  • Home sales historically comprised an average of 4.5% of U.S. GDP, a significant amount nationally​

  • Home sales affect multifamily, retail, self-storage and industrial properties in unique ways​

What This Means For Investors​

  • Affordability gap between owning and renting has surged to a new peak​

  • Dramatically higher home prices and mortgage rates are likely to support multifamily demand​

  • A home sales revival will require a substantive reduction of interest rates – much will depend on the Federal Reserve, Quantitative Tightening and Federal Treasury Issuance.​

*Through September​
Sources: Marcus & Millichap Research Services, National Association of Realtors​

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Christian Desnoes
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