Americans Face Historic Lack Of Affordability In Housing Market, Data Shows
Portfolio Pulse from Bibhu Pattnaik
The average American family's ability to own a home is at its lowest in a decade due to escalating interest rates, surging property prices, and mounting insurance expenses. Moody's housing affordability index has shown a decline for every U.S. state in the past four years. This trend could lead to negative outcomes such as reduced population growth, increased migration, decreased consumer spending, heightened inequality, and a rise in homelessness. For investors keen on gaining exposure to the real estate sector without direct property ownership, ETFs like iShares U.S. Real Estate ETF (IYR) and the Vanguard Real Estate ETF (VNQ), and stocks like Zillow Group, Inc. (Z) and Redfin Corporation (RDFN) are viable options.
October 15, 2023 | 5:47 pm
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NEUTRAL IMPACT
Redfin Corporation (RDFN) could see its business affected by the housing affordability crisis, given its close ties to the housing market.
Redfin, being closely tied to the housing market, could see its business impacted by the current housing affordability crisis. The impact on its stock price could be neutral in the short term as the overall market conditions are taken into account.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEUTRAL IMPACT
Zillow Group, Inc. (Z) could be impacted by the housing affordability crisis, as it is closely tied to housing market trends.
As a company closely tied to housing market trends, Zillow could see its business affected by the current housing affordability crisis. The impact on its stock price could be neutral in the short term as the overall market conditions are taken into account.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The iShares U.S. Real Estate ETF (IYR) could see increased interest as investors look for exposure to the real estate sector amidst the housing affordability crisis.
As housing becomes less affordable, investors may turn to real estate ETFs like IYR to gain exposure to the sector. This could potentially drive up the price of the ETF in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The Vanguard Real Estate ETF (VNQ) could benefit from the current housing affordability crisis as investors seek exposure to the real estate sector.
With housing affordability at a decade low, investors may look to real estate ETFs like VNQ for exposure to the sector. This could potentially increase the ETF's price in the short term.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70