The World's Best, and Worst, Housing Markets: Ritholtz Chart
Home sales, at least in the U.S., seem to be rising. Existing home sales in June increased to 5.04 million annualized. That number may be affected by the weather, as June sales most likely come from contracts signed after the depths of winter.
To find out if this is a global improvement, we can take a look at the International Monetary Fund's Global House Price Index. Its data and lovely infographics give us a few interesting things to digest. (You can also use the BIS data or OECD statistics).
The first chart shows the annual percentage change in housing prices. The U.S. is 10th, and housing prices in the country are still far below (35 percent, or so) their 2006 peak.
During the last decade's housing boom, I liked to look at three different metrics of home prices: Median purchase price relative to median income (house price-to-income ratio); the cost of renting versus owning (house price-to-rent ratio); and total housing value as a percentage of gross domestic product (chart not included this time).
The U.S. house price-to-income ratio is much closer to that of Germany and Japan than it is to France and the U.K. Home prices in Canada, Australia and Belgium appear to be far outpacing median incomes.
Finally, look at the cost of renting versus owning.
Ownership is "misaligned" in many nations. The five worst are Canada, New Zealand, Norway, Belgium and Australia. The U.S. is slightly below the middle. Japan appears to be the least attractive place for buyers. An aging population and 100-year mortgages will do that to a nation.
Income and interest rates will affect these rankings in the future and those changes will have a big effect on the global housing market. I was surprised to learn that the U.S. is doing well compared with the rest of the world at least in terms of income and rentals.
To contact the author on this story:
Barry L Ritholtz at email@example.com
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