January 17, 2024
Keys to Unlocking Value in US Housing
Authors:
- Jon-Paul A. Bernard,
- Matthew Bisanz,
- Holly Spencer Bunting,
- Ross E. Butler,
- Krista Cooley,
- Eric J. Edwardson,
- Haukur Gudmundsson,
- Jennifer T. Hartnett,
- Darius J. Horton,
- Paul A. Jorissen,
- Brian L. Kuhl,
- David A. K. Linley,
- Russell E. Nance,
- Scott P. Perlman,
- Oral D. Pottinger,
- Lauren B. Pryor,
- Claire Gibson Ragen,
- Eric M. Reilly,
- Terry Schiff,
- Jon A. Schlotterback,
- Susannah L. Schmid,
- Michael A. Serafini,
- Tori K. Shinohara,
- Miller Smith,
- Katherine H. Stevens,
- Jon D. Van Gorp,
- Stephanie B. Vasconcellos
As we begin 2024, the housing market is in uncharted waters, with plummeting housing starts, new listings at historic lows, mortgage interest rates up sharply over the past two years and a marked decrease in homes for sale. These conditions have burdened nearly all industries whose success is highly correlated with an active housing market, such as mortgage lending and real estate services, as well as related verticals like storage and home improvement. Given this context, it’s no surprise that some of the more esoteric corners of the housing market, such as home equity, mortgage servicing and residential transitional lending, are having their day.
Inevitably, this cycle, like every other one before it, will reverse when interest rates moderate and unleash years of pent-up demand for home sales and purchases, mortgage refinancing and new housing starts. According to the National Association of Realtors, the US is still short 5-6 million units of available housing. This number is likely to grow, as baby boomers are living longer and increasingly prefer to age-in-place (and by doing so hold onto a meaningful share of housing units that if made available to the market would help reduce the shortfall). Smart operators and investors, especially those in the forward mortgage and single-family rental markets, are refining and expanding their platforms, investing in new technologies and developing new products that will help accelerate growth when the market turns.
In the pages that follow, Mayer Brown colleagues with decades of experience in the industry unpack these unique market dynamics and offer a set of insights on the current landscape. The article compilation explores three pivotal themes: market trends, investment pitfalls, and new and innovative investment products. Our clients expect us to help them stay ahead in the fast-evolving housing market, which requires a keen understanding of the forces shaping the markets, adept navigation of potential challenges and an appetite for innovation. In this compilation, our aim is to help you tap into all three by providing actionable insights to unlocking value in the US housing market.
Inevitably, this cycle, like every other one before it, will reverse when interest rates moderate and unleash years of pent-up demand for home sales and purchases, mortgage refinancing and new housing starts. According to the National Association of Realtors, the US is still short 5-6 million units of available housing. This number is likely to grow, as baby boomers are living longer and increasingly prefer to age-in-place (and by doing so hold onto a meaningful share of housing units that if made available to the market would help reduce the shortfall). Smart operators and investors, especially those in the forward mortgage and single-family rental markets, are refining and expanding their platforms, investing in new technologies and developing new products that will help accelerate growth when the market turns.
In the pages that follow, Mayer Brown colleagues with decades of experience in the industry unpack these unique market dynamics and offer a set of insights on the current landscape. The article compilation explores three pivotal themes: market trends, investment pitfalls, and new and innovative investment products. Our clients expect us to help them stay ahead in the fast-evolving housing market, which requires a keen understanding of the forces shaping the markets, adept navigation of potential challenges and an appetite for innovation. In this compilation, our aim is to help you tap into all three by providing actionable insights to unlocking value in the US housing market.
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