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Housing Dimensions Blog

Rick Palacios Jr.'s picture

For Rent Beating For Sale

by Rick Palacios Jr.

The stock market has changed its tune from being bullish on for-sale housing to being bullish on rental housing. Apartment stocks are up 35% YTD, and single-family rental stocks are up 5%—while the home builders are flat.

ForRentvsForSale_Q42014

Sources: John Burns Real Estate Consulting, LLC; Thomson ONE

While survey after survey (including our own) indicates that consumers overwhelmingly want to own a home at some point in their lives, there is a big difference between the ambition to own and the ability to own. Increasingly, it appears that financially strapped families desirous of single-family living are turning to rental housing.

Rick Palacios Jr.'s picture

Why Frame Walls When You Can Frack Wells?

by Rick Palacios Jr.

In late 2008, oil and gas pipeline construction workers earned $0.46 per hour more than new home framing contractors. Today, they earn $8.15 more per hour. It's no wonder labor is tight in the new home market, especially in Texas and Denver, the closest major markets to North Dakota. Since 2008, framing contractor wages have fallen 8%, while oil and gas pipeline construction wages have swelled by 20%.

by Rick Palacios Jr. and Ali Wolf

8% fewer homes will transact than normal in 2014, purely due to student debt.

This week, our clients received a 30-page paper that assesses the impact of student loans on home buying for households under the age of 40. Our conclusion is that 414,000 transactions will be lost in 2014 due to student debt. At a typical price of $200,000, that is $83 billion per year in lost volume.

Source: John Burns Real Estate Consulting, LLC

The analysis was quite complicated and involved a few assumptions, but we believe it is conservative, primarily because we looked only at those under the age of 40 with student debt.

At a high level, the math is as follows: