“The global housing market is showing some early signs of stabilizing, with house prices leveling out more quickly and at a higher level than would normally be expected,” a team led by the bank’s chief economist, Jan Hatzius, said in a note to clients on Monday.
Australia, Canada, and the US all look particularly resilient with home prices recently rising in all three markets, the strategists added.
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Sales of new-build family homes also smashed economists’ predictions for April, according to a report published Tuesday by the US Census Bureau – which some see as another sign of housing-market resilience.
That rebound came despite a rapid rise in mortgage rates, with the average 30-year fixed-rate mortgage climbing from 5.25% to 6.4% over the past year, according to data from Freddie Mac.
The surge in mortgage-repayment costs would usually be expected to weigh on prices, as they make buying a house less affordable and deter people locked in at lower mortgage rates from selling their homes.
But low inventory levels, post-pandemic savings, and a rise in immigration have all supported the Australian, Canadian, and American housing markets, Goldman Sachs said.
“Very low housing supply, stronger household balance sheets due to the large amount of excess savings accumulated during the pandemic, and support from rebounding immigration are all contributing to the recent house price resiliency,” Hatzius’ team said.
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House prices have “pulled back sharply, but somewhat surprisingly appear to be stabilizing sooner (and at a higher level) than historical relationships would imply,” they added.
Source: africa.businessinsider.com