A BAML analyst anticipates that about 75% of household debt is in fixed-rate products and hence, a gradual Fed hiking cycle shouldn’t shock the household sector. Michelle Meyer notes in her May 17 piece titled “Housing Watch-Can we fix it?” that real estate is still commonly considered to be a good investment, which could continue to underpin the market.
Recovery in housing market has further to go
Meyer points out that housing purchase applications have been showing an uptrend though in a choppy fashion. Tracking housing start forecasts, she notes that we are close to consensus for multifamily starts, and she is penciling in a slightly weaker trajectory this year, though stronger growth is anticipated next year. However, on single family starts, she appears more cautious...
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