Apollo outlines factors behind U.S. housing market weakness
The PHLX Housing index .HGX was down 1.4% on Tuesday after data showed that U.S. construction spending unexpectedly fell in July and hit the lowest level in nearly three years as higher mortgage rates weighed on single-family homebuilding.
Apollo Global Management also released a wider overview of the U.S. housing market on Tuesday, with Torsten Slok, chief economist and the lead author of the report, highlighting 10 facts that explain some of the issues the market is dealing with.
Mortgage rates of 6.7% and a median home price of $400,000 are both "holding down traffic of prospective homebuyers," Slok said, noting that 75% of U.S. households can only afford a home priced below $300,000.
He notes that the share of first-time homebuyers is at its lowest level in decades and that the age of the median first-time buyer has risen to 40 years old, from 30 in 2008.
Also, Slok writes that the share of households planning to move over the next 12 months has fallen to a record low of about 7%.
And with U.S. immigration declining, household formation has slowed sharply as Slok says this removes "a key source of underlying housing demand."
Meanwhile, since new houses are not being built fast enough to replace aging houses, the typical American home is now 42 years old, he wrote.
Slok also points out that U.S. homes are getting smaller, with the median size of new single-family homes falling in the last decade as builders try to work with the price points that buyers can still reach.
While house price inflation has stalled near 1% overall, he notes that it is "turning higher again for the most expensive homes, where buyers are least dependent on mortgage financing."
However, in a different part of the market, delinquency rates in multifamily houses have climbed above their post-global financial crisis peak, to their highest level since at least 2004.
Still, in all, Slok notes that household equity in real estate is around $35 trillion in total, making for an average of about $400,000 per owner-occupied home.
For equity investors in housing stocks, the performance has been choppy this year. The HGX is currently down nearly 4% for the year-to-date. This compares with an almost 16% gain at its peak so far in 2026 and 9% for its low for the year so far.
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