Living Sector Trends – North America
Living sector trends in the U.S. and Canada mirror the global picture. There’s an acute housing shortage (for example, the U.S. is short by over three million units by our estimates), resulting in a historic housing affordability crisis. In this environment, renting has become more affordable than buying. In the exhibit below, Hines Research compares the relative attractiveness of renting versus buying based on a comparison of rents vs. overall costs to buy (including mortgage, taxes, and insurance), a detailed analysis that can be performed in the U.S. where the data are available.
Over the period for which we have data, this analysis found that home prices have never been more unaffordable. Conversely, on a relative basis, renting has never been more attractive vs. buying. In Canada, we found less evidence of a shortfall in housing (relative to the U.S.). However, unaffordability in the major metros (such as Toronto and Vancouver) is just as, if not more, intense. The result has been an even more substantial reduction in the Canadian homeownership rate than in the U.S., providing support for living investment there as well.
