The U.S

The U.S. Housing Market Since 1976, In Pictures

We’re going to tell a story about the history of the market for new homes in the U.S. almost entirely in pictures today. While all the charts we’ll present cover the period from January 1976 through July 2020, most of the focus will be on the last several months of that time span.

Let’s start with the history of 30-year conventional mortgage rates:

saupload 30 year conventional fixed mortgage rates in US 197104 202007

The lower the interest rates, the more affordable a higher sale price for new homes can be, which can contribute to rising sale prices. Remember, home buyers aren’t just buying a house – most are also buying a monthly mortgage payment they believe they can afford. With mortgage rates at all-time lows, both average and median new home sale prices are rising toward all-time highs.

saupload median and average new home sale prices 197601 202007

With the Federal Reserve acting to lower interest rates to help stimulate the U.S. economy during the coronavirus recession, the number of new home sales has been rising. The following chart shows the trailing twelve-month average of those sales, which smooths out seasonal volatility in the data.

saupload ttma annualized number new home sales 197601 202007

The combination of higher average prices and rising number of sales means that the market capitalization of the new home market in the U.S. is rising.

saupload ttma new home sales market cap 197601 202007

The new home market in the U.S. is showing surprising strength during the coronavirus recession. The data presented in these four charts confirms that observation and helps explain why.

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Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.

Credit: SeekingAlpha

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