Itaú Blog

Market update: Perspectives and trends in the US real estate market

Check out the key points discussed in the monthly edition of Itaú Private Bank's live session, where we explored the landscape of the American real estate market

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Itaú Private Bank

• 3 minutos de leitura

Créditos: Itaú Private Bank

On the last Tuesday, the 20th, we conducted our monthly "Market Update" live session on global markets, featuring Marcelo Aagesen, Head of Global Markets, Niraj Patel, Chief Equity Strategist, and Roberto Martins, Head of International Solutions at Itaú Asset Management.

The real estate market in the United States is one of the most important and influential sectors in the country's economy. It encompasses various segments such as residential, commercial, and hospitality, playing a fundamental role in economic growth. Our session focused on the residential real estate market, which includes single-family homes, condos, and multifamily apartments.

The demand for residential properties in the United States is primarily driven by the formation of new households, which typically occurs when individuals move out of their parents' homes, get married, or go through divorces. This demographic-driven dynamic leads to a continuous demand for residential properties.

After a period of steady growth from the 1960s to the 1980s, there was a slowdown in household formation. However, starting in 2013, this trend reversed, and household formation began accelerating again. Currently, the residential real estate market in the United States is in a very healthy cycle, although some regions may have experienced a reduction in property prices. Following the 2008 global crisis, there was an oversupply of housing inventory, but this situation is gradually normalizing, although in some regions, the supply of properties still falls short of demand, leading to higher prices, as seen in Florida and Texas, for example.

Despite the challenges, new home construction in the United States continues to thrive. Builders have adopted strategies to attract buyers, such as offering more favorable financing rates in the early years. These measures have contributed to increased construction of new residences and a better supply of properties in the market.

During our session, we also addressed a survey indicating that qualified investors in Brazil allocate only 0.5% to this type of asset, while in the rest of the world they allocate 25%. Watch the full recording and join the discussion on the best way to invest in US real estate and learn more about Real Estate Investment Trusts (REITs), which are American real estate funds. Additionally, discover the reasons why we believe that the best way to invest in these assets is through Private Real Estate.

Takeaways

  • The formation of new households drives the demand for residential properties.
  • Household formation in the US started accelerating again in 2013 after a slowdown.
  • The residential real estate market is healthy, with some regions experiencing a decrease in property prices.
  • The supply of properties is still below demand in many regions, leading to higher prices.
  • Interest rates impact the real estate market, but demand is primarily driven by demographic factors.
  • New home construction in the US is thriving, with builders employing strategies to attract buyers.

Watch the full recording below: