Shortage of supply, NOT rates is the primary driver of unaffordability says new Zillow CEO Jeremy Wacksman reported by WSJ. This shortage is a significant barrier for potential buyers, limiting their options and driving prices up with Zillow estimating a shortfall of about 4.5 million homes. Even potential interest rate cut(s) may not alleviate the availability crisis, as any new demand could exacerbate the supply issue and push prices higher. Read our Foxhole insights here.
Realtor.com reports that Gov. Ron DeSantis wants to eliminate property taxes, potentially making Florida the first state without them. Eliminating property taxes could drastically affect public services, funding schools, parks, and emergency services. While removing property taxes could make homeownership more attainable, it poses challenges in funding essential services, echoing concerns seen in North Dakota's recent rejection of a similar amendment. See why it matters...
There is a new build-to-rent venture backed by J.P. Morgan Asset Management and Georgia Capital to opportunistically address housing shortages in the Southeast. Why does it matter? Corporate ownership significantly impacts housing availability and affordability in Georgia. Demographic shifts and rising housing prices make single-family rentals increasingly attractive for Wall Street interested in literal rent seeking. At the same time, corporate ownership of housing represents a “soft” target for politicos frustrated with how to address the high price of housing. Get our thoughts on the matter.
US Administration proposals are starting to shake confidence in homebuilders in the US and Canada reported Newsweek. NAHB states that the 25 percent tariff on Canadian softwood lumber will add to the existing 14.5 percent duty, raising the total effective tariff to nearly 40 percent. What's our take? RE industry leaders see the US administration's tactics to gain concessions on border security and drug interdiction. Unfortunately, "hostage taking" of US businesses is prevalent, with Canadian leaders responding with counter tariffs. Learn more.
Realtor.com sizes up the supply gap in 2024. Its nearly 4M homes, underscoring the ongoing challenges in affordability and availability, particularly affecting young households. The South faces the largest gap by number of units, while the Northeast has the largest scaled gap. This lack of overall supply is forcing buyers to go more “up market,” making the average age of the ‘24 homebuyer to be 56 years old. That is 6 years from being eligible for Social Security. Read here on why the Foxhole team thinks if more new home supply came online, household formations would absorb the supply (probably at lower margins.)
“Grow or Die” is the driving force behind recent acquisitions involving Davidson Homes, Seiksui House, Lennar, and Rausch Coleman. Why does it matter? The housing market is changing due to rising affordability issues, higher borrowing costs, and longer development timelines. Consequently, mid-sized and regional builders are selling to well-capitalized companies, enhancing their national presence and competitiveness. Get our thoughts on why we believe the public homebuilder market share may be close to 70% of new home supply by the end of the decade.
Moody’s Analytics presents this proposal to add to housing supply. Mark Zandi’s crack team put together cogent analysis on how to create supply on a revenue neutral basis (read it - proposal pays for itself). The Housing and Economic Mobility Act of 2025 aims to bridge the gap in affordable housing, which is causing economic strain and limiting opportunities for low- and moderate-income families. By increasing housing supply, the act seeks to lower rents and improve affordability, potentially adding nearly 290,000 affordable units annually by the end of the decade. Read our view and why this matters here.
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