U.S. real housing price appreciation remains lower than in the other countries

The housing sector has been lackluster and many investors are wondering if there is cause for worry, according to MetLife Investment Management’s “A stable outlook for the U.S. housing sector” report.

Though the general economic recovery has been rather prolonged, evidence suggests there remain bright spots in the residential real estate market and continued, albeit moderated, growth over the medium to long term is still the base case scenario.

When examining the global housing market, U.S. real (adjusted for inflation) housing price appreciation remains lower than in the other countries (Figure 1). Global real housing prices have outpaced the United States, exceeding their pre-crisis peak. The global comparison becomes starker when evaluating housing price-to-income ratios over the past 20 years. Since 1997, the United States has lagged other Western nations on price-to-income growth (Figure 2). In other words, housing prices have not increased at the same rate