The most ‘underreported’ factor influencing housing market, according to Calculated Risk

Source: Deseret News — 

Bill McBride, author of the economics blog Calculated Risk, said there’s a key reason why both rent and home price growth is slowing amid the U.S. housing correction playing out today.

In a live Twitter Space hosted by Fortune Magazine on Friday, McBride called it the most “underreported” factor.

What is it? Household formation — both because of how much it accelerated amid the COVID-19 pandemic and how it’s slowing down now.

Last year, the “boom in house prices made sense for a number of reasons,” he said, given so many millennials were aging into home buying age. “But what was surprising was the rapid increase in rents at the same time, which implies that we’re getting demand for both home buying and for renting.”

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