I think US housing is the single best trade in the world. Mortgage rates are rising fast but 7 hikes are now priced in for this year and a few more after that. I just can't see a sudden stop in demand with borrowing rates up 50 bps in the past couple months.
From CIBC:
Freddie Mac reported that the 30-year fixed rate mortgage survey averaged 4.16% this week, up from 3.85% a week ago and well above the 3.09% level a year ago. Mortgage News Daily (more accurate for capturing movements later in the week) pegs rates to be 4.50% (up 22 bps W/W) after considerable weakness in bond markets. Despite facing higher monthly payments, Redfin’s latest data showed home prices saw their largest four-week jump in over five years, surging 7% M/M. Redfin’s Homebuyer Demand Index for last week was 10% higher than a year ago (up 1.6% W/W). The real estate brokerage’s data indicates active listings were down 23% Y/Y (and 50% lower than 2020) to an all-time low, while median home sale prices over the past four weeks are up 17% Y/Y to a record $376K (36% higher than two years ago).
There simply aren't enough houses out there.
