Tight markets support house price and rental growth

This quarter sees the launch of a redesigned US Housing Market Analyst. The aim of the Analyst, to provide our views on the outlook for the US housing market, remains the same. However, there is now a clearer distinction between homeowner and rental markets, and more balanced coverage of the two sectors. That should make it easier to find the information most of interest to you. Please contact us with any questions about this change. The fiscal stimulus has provided a short-term boost to household incomes, which will help GDP growth to accelerate to 2.8% this year. Higher earnings growth will limit the deterioration in mortgage affordability arising from changes in mortgage interest rates, which recently hit a four-year high and are set to rise further over 2018. The inventory of homes for sale has fallen to record lows, which is both constraining home sales and providing some support to house prices, which are likely to rise by 5% this year. That lack of inventory is also supporting rental demand which, in turn, will underpin the vacancy rate. Rental growth is therefore only set for a marginal slowdown, to around 3.5% by the end of 2018.