Investment Rating - The report maintains an "Overweight" rating for the real estate development and real estate services sectors [6]. Core Insights - The U.S. housing market in H1 2025 is under significant pressure from high prices and interest rates, leading to historically low housing affordability and a decline in both new and existing home sales [1][11]. - Existing home prices have reached record highs, with the median price in June 2025 at $433,000, marking a 1.4% year-on-year increase [20]. - The overall inventory of homes has increased slightly, but existing home inventory remains tight, indicating ongoing supply-demand imbalances [3][48]. Summary by Sections Transactions & Prices - In the first half of 2025, new home sales totaled 330,000 units, down 3.7% year-on-year, while existing home sales were 2.04 million units, a slight decrease of 0.2% [2][11]. - The median price for new homes averaged $417,000, a decrease of 1.2% compared to the same period in 2024, while existing homes saw a median price increase of 2.4% to $411,000 [2][20]. Supply - As of June 2025, new home inventory stood at 502,000 units, a 2.7% increase from December 2024, while existing home inventory rose to 1.54 million units, a 35.1% increase [3][48]. - The months of supply for existing homes is 4.7 months, indicating a continued shortage despite the marginal increase in inventory [48]. Interest Rates - The Federal Reserve has maintained the federal funds target rate between 4.25% and 4.50% since early 2025, with 30-year fixed mortgage rates fluctuating between 6.65% and 6.96% [4][53]. - As of August 2025, the average 30-year fixed mortgage rate slightly decreased to 6.59%, still within the 80.4% percentile historically [4][53]. H2 2025 Outlook - The report anticipates that high construction material costs and increased inventory pressures will lead to a conservative approach from builders, resulting in a continued decline in new home starts [60]. - The "rate lock effect" is expected to persist, limiting existing homeowners' willingness to sell, thereby exacerbating the existing home inventory shortage [1][60].

Investment Rating - The report indicates a cautious outlook for the U.S. residential market in 2025, suggesting potential price softening for existing homes and a stable increase in new home market share [1]. Core Insights - The "rate lock effect" continues to be a core issue affecting the supply and sales of existing homes, with a need to monitor the impact of interest rate cuts on the market [1]. - Existing home transactions may gradually shift from a seller's market to a buyer's market, potentially leading to price adjustments and marginal improvements in housing affordability [1]. - Developers are expected to increase the supply of lower-priced housing to enhance affordability, with new home sales and market share projected to grow steadily in 2025 [1]. Sales & Prices - In 2024, U.S. home sales slightly declined under the dual pressures of high prices and high interest rates, with total transactions at 4.746 million units, down 0.4% year-on-year [3]. - New home sales remained relatively stable at 682,000 units, up 2.4% year-on-year, while existing home sales fell to 4.064 million units, marking a historical low [8]. - The median price for new homes was $420,000, a 1.2% decrease from 2023, while existing home prices reached a median of $401,000, up 4.5% year-on-year [15]. Supply & Interest Rates - By the end of 2024, total housing inventory in the U.S. increased by 14.3% year-on-year, with existing home inventory remaining tight at 1.15 million units, up 16.2% year-on-year [21]. - Despite the Federal Reserve's interest rate cuts, the 30-year fixed mortgage rate remained high at 6.96% as of January 2025, indicating ongoing pressure on potential homebuyers [27][28]. Challenges in the Market - The U.S. housing market faces significant challenges, including a supply gap of 3.7 million units and a high percentage of homeowners unwilling to sell due to low existing mortgage rates [5][33]. - The affordability crisis is exacerbated by high home prices and interest rates, with the housing purchase index nearing historical lows [20]. 2025 Outlook - The report anticipates that existing home prices may soften, transitioning the market dynamics towards a buyer's market, influenced by the lengthening transaction periods and increasing new listings [37][40]. - The share of new homes is expected to increase as builders focus on smaller, more affordable units, with a projected 13.8% growth in single-family home starts in 2025 [42].