Strong demand for housing looks sustainable. Even before the pandemic, demographic tailwinds and historically-low mortgage rates had pushed demand to high levels. … consumer surveys indicate that household buying intentions are now the highest in 20 years. … mortgage lending standards have remained fairly tight. With demographic trends still strong, mortgage rates very low, housing affordability still high, and household wealth as a share of income at the highest level in US history, demand should remain strong.
The supply picture offers no quick fixes to the shortage of available homes … The resulting picture is one of a persistent supply-demand imbalance in the years ahead. … [Our] model suggests that rising prices will only gradually reduce affordability enough to dampen demand and mitigate the supply-demand imbalance. As a result, the model projects double-digit price gains both this year and next.
Goldman on Housing: Double-digit price gains in 2021 and 2022
A few brief excerpts from a Goldman Sachs research note on housing: