Is the US housing market boom sustainable? Why this time is different
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Residential home prices in the US have spiked on the back of falling interest rates and other pandemic-related market disruptions.
The key takeaways of this edition are:
- US house prices are up by more than 10% year-on-year.
- The housing sector is driving the economy and will help anchor the recovery due to falling rates and changes in home-buying preferences.
- The higher-credit quality of mortgagers and more fixed-rate loans suggest limited systemic risk compared to the 2000s.
- Today's housing boom is characterized by less speculative buying and oversupply, reducing the risk of collapse.
- Demand for commercial real estate is gearing towards industrial and logistic-related properties, away from retail and office buildings.
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