Despite government efforts to boost the housing market, China’s house prices plummeted in May at the fastest rate in nearly a decade. The excess supply of homes has driven down demand, leading to the sharpest decline in new home prices since 2014 and the largest drop in existing home values since 2011. Despite measures like interest rate cuts and government-backed home purchases, investors remain skeptical about the market’s recovery.
A young woman in Bengaluru, India’s technology hub, has used a clever spin on a viral Instagram trend to find a new apartment. Neha’s video, which mimics the popular “Man in Finance” trend, highlights the challenges of finding affordable housing in the bustling city. With over 1.5 lakh views and 3,000 likes, Neha’s video has resonated with many Bengaluru residents who can relate to the struggles of securing a suitable home.
Home sales in Calgary saw a modest 0.8% decline year-over-year in May, with 3,092 properties changing hands. The decrease was primarily driven by a drop in sales of lower-priced detached and semi-detached homes. However, the Calgary Real Estate Board (CREB) reported that activity remained 34% higher than historical averages for the month.
Despite promises to reduce housing costs, the Biden administration’s policies have made homeownership unaffordable for many Americans. High government spending has contributed to inflation, and Biden’s anti-fossil fuel agenda has driven up energy prices. As a result, home prices are now at an all-time high relative to household income, and mortgage rates are rising rapidly.
China has announced a series of unprecedented measures to stabilize its struggling property sector. The measures include allowing local governments to purchase unsold apartments, relaxing mortgage rules, and pledging to complete stalled construction projects. The move is seen as a major intervention by the government to address the growing crisis in the property sector, which has been a major drag on the Chinese economy.
The cost of renting in London has skyrocketed, with only six postcodes remaining where tenants can find a room for under £800 per month. These affordable areas are located further out from the city center, as renters seek cheaper options to cope with rising living expenses. Despite the lower rents, potential tenants should also consider the higher council tax rates in some of these postcodes.
A new survey from the Federal Reserve Bank of New York reveals that US renters are increasingly pessimistic about their ability to ever own a home. Only about four in 10 renters believe they will be able to buy a home, the lowest level since the survey began a decade ago. This pessimism is particularly pronounced among younger renters, with half of those under age 50 not believing they will be able to buy a home. The survey also found that expectations of home-price growth have reaccelerated after falling last year. Renters expect home prices to rise at a 2.7% annualized rate over the next five years, roughly in line with inflation expectations.
Renting a place in a major city can be an expensive endeavor. According to financial experts, it’s recommended to spend no more than 30% of your pre-tax income on rent. The Global Property Guide has compiled a list of median rental prices for 1-bedroom apartments in the most expensive areas of several major Asian cities. The prices range from $481 to $25,802 per month. Despite a downturn in the housing market in Asia amidst economic weakness and inflation, cities like Taipei and Singapore remain resilient with rising housing prices. The report suggests that the global housing market is stabilizing as inflationary pressures ease and central banks pause rate hikes.
As mortgage rates climb, homebuyers are increasingly turning to adjustable-rate mortgages (ARMs) to minimize their monthly payments. These loans, which offer lower interest rates than fixed-rate options, have been gradually gaining market share, reaching 7.8% of mortgage demand last week, the highest level of the year. The average contract interest rate for ARMs has also declined, standing at 6.60%. Experts attribute this trend to stubbornly high inflation, which is pushing mortgage rates higher. Despite the resurgence of ARMs, overall mortgage demand has decreased, with applications for refinancing and home equity loans also falling. Meanwhile, applications from potential homebuyers have dropped by 14% year-over-year.
Despite rising mortgage rates, strong demand and tight supply continue to push home values higher. The S&P CoreLogic Case-Shiller national home price index showed a 6.4% year-over-year increase in February, the fastest rate of growth since November 2022. The 10-city composite rose 8%, and the 20-city composite saw an annual gain of 7.3%. San Diego saw the biggest gain among the 20 cities in the index, with an 11.4% increase from February 2023. Chicago and Detroit both reported 8.9% annual increases, while Portland, Oregon, saw the smallest gain of just 2.2%. The Northeast region, which includes Boston, New York, and Washington, D.C., has been the best performing market for the past half year.
