Thread by @odetakushi

U.S. households own nearly $34 trillion in owner-occupied real estate, $11 trillion in debt, and the remaining nearly $23 trillion in equity. The national "LTV" is at its lowest level in more than three decades. (1/6)

Mortgage debt as % of disposable income is at a near historic low. Many homeowners have locked into sub-4% rates. In fact as of Q1, the average interest rate on outstanding mortgage debt was appx. 3.5%. (2/6)

Lending standards today are strict & those who are qualifying for mortgages have great credit. The median credit score for approved borrowers was 788 during the Q1 of 2021, up from 773 one year ago. (3/6)

Demand has outpaced supply since 2009. We have been underbuilding for a decade, and household formation will continue to grow as millennials continue to form households. It will take years to narrow the gap between supply and demand. This puts upward pressure on prices. (4/6)

Speaking of millennials. >72 million between ages 25-40. They lag behind their generational predecessors homeownership rates bc delayed lifestyle choices delay the desire for homeownership. But now they are settling down & buying that home. Millennial demand is here to stay.(4/6)

It's important to look to the fundamentals. At the onset of the COVID crisis last March, we wrote this blog post about how the housing market may weather the Coronavirus impact better than the GFC. And that was indeed the case. (6/6)
blog.firstam.com/economics/why-…