PKB News and Press, Invesco Dynamic Building & Construction From 03/02/23

Summary COVID created an incredible disequilibrium in the housing market where house prices surged 40%+ and rents are only just playing catch-up. While rents have increased substantially in recent years, it is still far more desirable to rent in most places when compared to buying. ...

Summary With the Federal Reserve approaching the tail end of an aggressive interest rate hiking cycle, investors have been bracing for a hard landing. The stock market has stabilized and risen since last October (S&P +13.7%) but has also hit a temporary air pocket last month (-2.6%)...

Summary Applications for mortgages to purchase a home plunged every week since late January and now dropped to a new 28-year low. Homebuilders played a big role in the January-hype-and-hoopla show. Bankruptcy equities and collapsed post-SPAC and post-IPO stocks doubled or tripled in...

Summary Today’s US data has been disappointing with housing, manufacturing, and construction data all hinting at challenging conditions. Unfortunately, given the lack of buyer interest in the residential property market, we expect construction activity to remain a drag on overall...

Summary Non-seasonally adjusted new home sales were indeed higher, jumping by 12,000 to 59,000 sales from December 2022's revised estimate. The partially complete time-shifted rolling twelve-month average of the U.S. new home market capitalization for January 2023 is $24.81 billion. ...

Summary Year-over-year growth in consumer debt payments since 2020 has outstripped growth in discretionary income by the most on record. Some $10 trillion of US private debt up for renewal in 2023 now faces interest costs 400 to 500 basis points higher than they have been paying. A ...

Summary Stock market bears are fixated on the belief that inflation is not only "running hot" but also "accelerating." Natural gas prices have truly collapsed, falling by way more than ever before in a short span of time. It takes time for monetary policy - which is undoubtedly tigh...

Summary Apartment REITs were the second-worst-performing property sector in 2022 - barely outperforming the troubled office sector - despite delivering a record year of operating performance highlighted by 20% FFO growth. Following two years of historic rent growth, there is little doub...

Summary There was a glimmer of hope in the housing data from January. When housing moves a lot in one direction or the other, it has a disproportionate impact on aggregate growth. Housing is a big slow-moving beast and the basic math on affordability still looks very dreary to me. ...

Summary Market is still frozen, potential sellers sit on vacant properties, hoping this too shall pass. Cash Buyers, investors, second-home buyers pull back further. The median price of all types of homes fell for the seventh month in a row, to $359,900, down 13.2% from the peak in June...