Trumponomics Causes U.S. Housing Starts To Decline

May’s 0.9% drop is new sign of weakness in the housing market. Trumponomics Causes U.S. Housing Starts To Decline In May (#GotBitcoin?)

A gauge of U.S. home building declined in May, a fresh sign of weakness in the housing market.

Housing starts fell 0.9% in May from the prior month to a seasonally adjusted annual rate of 1.269 million, the Commerce Department said Tuesday. That was a steeper decline than the 0.4% decrease economists had expected.

The report follows a drop in U.S. home-builder confidence in June, as builders reported concerns over rising construction costs and trade issues. The National Association of Home Builders housing market index fell to 64 this month from 66 in May, the trade group said Monday.

Tuesday’s housing data, “along with a constellation of other economic factors, could weigh on the Federal Reserve’s scales regarding whether or not they will cut rates, which would potentially provide some stimulus for the economy and the housing market,” said John Pataky, executive vice president at TIAA Bank.

Fed officials meet Tuesday and Wednesday in Washington, and are expected to deliberate whether to lower interest rates should the economic outlook darken.

There were some bright spots in the Commerce Department’s latest release. Residential building permits, which can signal how much construction is in the pipeline, rose 0.3% from April to an annual pace of 1.294 million. That was the strongest monthly rate of growth since December. The pace of starts in April was revised higher, another positive sign.

Housing-starts data are volatile from month to month and can be subject to large revisions. May’s 0.9% drop in starts came with a margin of error of 12.9 percentage points.

Home construction has been cooling more broadly as the overall housing sector has struggled with high prices and low inventory, even with a strong labor market and rising incomes. Starts were down 4.7% from May last year.

Borrowing costs have fallen in recent weeks, which could help the selling season this summer. A 30-year fixed-rate mortgage averaged 3.82% for the week ended Thursday, according to Freddie Mac, near historic lows and down from 4.62% a year ago. The National Association of Realtors will release existing-home sales data for May on Friday. Trumponomics Causes U.S. Housing, Trumponomics Causes U.S. Housing, Trumponomics Causes U.S. Housing, Trumponomics Causes U.S. Housing,Trumponomics Causes U.S. Housing,,Trumponomics Causes U.S. Housing,

Updated: 7-18-2019

U.S. Housing Starts Declined 0.9% In June

Residential building permits, which can signal how much construction is in the pipeline, dropped 6.1%.

Home building in the U.S. declined in June, a fresh sign of weakness in the housing market.

Housing starts, a measure of new-home construction, fell 0.9% in June from the prior month to a seasonally adjusted annual rate of 1.253 million, the Commerce Department said Wednesday.

Residential building permits, which can signal how much construction is in the pipeline, dropped 6.1% from May to an annual pace of 1.220 million. That was the biggest monthly drop since March 2016.

“Lower mortgage rates are not spurring the home building industry to increase construction, as lack of skilled workers, cheaper material costs and land zoned for building continue to hamstring production,” said Robert Frick, corporate economist at Navy Federal Credit Union, in a note to clients.

Economists surveyed by The Wall Street Journal had expected a 0.7% decrease for starts and a 0.3% decrease for permits.

Housing-starts data are volatile from month to month and can be subject to large revisions. June’s 0.9% decline for starts came with a margin of error of 7.9 percentage points.

Starts were up 6.2% from June last year. Building permits were down 6.6% from June 2018.

The overall housing sector has struggled with high prices and low inventory, even with a strong labor market, low borrowing costs and rising incomes.

The average rate on a 30-year, fixed-rate mortgage eased further in June to 3.73% in the final week of the month, according to Freddie Mac, the lowest rate since late 2016.

Cooling mortgage rates in recent months could be nudging the housing market toward a modest spring performance. Sales of previously owned homes rose 2.5% in May from the prior month, the National Association of Realtors said last month.

Updated: 8-18-2019

U.S. Housing Starts Fell 4.0% in July

The Northeast saw the sharpest dip.

Home building in the U.S. fell for a third straight month, showing that rising labor and material costs continue to dent the pace of home construction.

Housing starts, a measure of new-home construction, fell 4% in July from the prior month to a seasonally adjusted annual rate of 1.191 million, the Commerce Department said Friday.

Residential building permits, which can signal how much construction is in the pipeline, rose 8.4% from June to an annual pace of 1.336 million.

Economists surveyed by The Wall Street Journal had expected a 1.0% drop in housing starts and a 4.1% increase for permits last month.

Housing-starts data are volatile from month to month and can be subject to large revisions. July’s 4% decline for starts came with a margin of error of 8.0 percentage points.

Starts were up 0.6% from July last year and building permits were up 1.5% from July 2018.

The Northeast saw the sharpest dip in housing starts with a decline of 13.8% from June. Building permits were also down 3.3% from the previous month in the region.

Despite historically low mortgage rates and rising wages, the housing sector has been strained by a low inventory of affordable homes propelled by rising construction costs and lack of land.

Average rates for 30-year mortgages are at their lowest level in nearly three years, Freddie Mac said Thursday. The National Association of Home Builders also reported Thursday that builder confidence in the market for new single-family homes rose in August and said demand for homes, particularly at lower price points, is strong.

Home builders have struggled to keep up with demand, as the tight job market has created labor shortages, raised labor costs and prolonged construction. Tariffs on Canadian lumber and certain Chinese materials, like quartz and granite, have also made building materials more expensive.

Updated: 11-3-2019

People Are Staying in Their Homes Longer—a Big Reason for Slower Sales

Homeowners nationwide are staying put an average of five years longer than they did in 2010, a new analysis shows.

Americans are staying in their homes much longer than before, creating a logjam of housing inventory off the market that helps explain why home sales have been sputtering.

Homeowners nationwide are remaining in their homes typically 13 years, five years longer than they did in 2010, according to a new analysis by real-estate brokerage Redfin. When owners don’t trade up to a larger home for a growing family or downsize when children leave, it plugs up the market for buyers coming behind them.

“If people aren’t moving on, there just are fewer and fewer homes available for new home buyers,” said Daryl Fairweather, Redfin’s chief economist.

More homeowners staying put has helped cause housing inventory to dwindle to its lowest level in decades, which has also helped push up prices on homes for sale. Adjusted for population, the inventory of homes for sale is now near the lowest level in 37 years of record-keeping, according to housing-data firm CoreLogic Inc.

Fewer homes for sale is a big reason why even ultra-low mortgage rates, record levels of home equity and a strong job market haven’t jump-started the sluggish housing market.

Economists say aging baby boomers are the biggest culprits because many are staying healthier later in life and choosing not to downsize. Some look around at the lack of smaller, less expensive homes and are loath to get into bidding wars with their children’s generation to get one.

States, such as California and Texas, have also implemented tax policies that make it easier for older residents to remain in place.

Barbara O’Mara, a 67-year-old retired accountant, and her husband have lived in their home in Danville, Calif., about a half-hour drive east of Oakland, for 32 years.

The couple bought the home for $440,000 in 1987 and it would now be valued at around $1.8 million, she said. If they sold, they would have to pay capital-gains taxes on the windfall and pay much higher property taxes because California limits property tax increases as long as homeowners stay put.

The couple was without power for four days as the local utility seeks to prevent the spread of wildfires, but Ms. O’Mara said they still have no plans to leave. “We would adore a change. We’d like to move to the ocean,” she said.

There are few young people moving into the neighborhood, she added, “because none of the old people are moving out.”

In the San Francisco metropolitan area, a typical homeowner stays 14 years, up from less than 10 years in 2010. Inventory in the same period has plunged more than 46%.

Meanwhile, the Seattle metro has seen a huge influx of new jobs, and housing supply hasn’t kept pace. Homeowners there are staying more than three years longer than they did in 2010. The inventory of homes for sale in Seattle has declined more than 50% over the last nine years, while home prices have risen more than 80%, according to Redfin.

Kristen Schriver and her husband found their family of four had outgrown their 1,000-square-foot Seattle home, which she bought for $140,000 a couple of decades ago.

But Ms. Schriver, a 53-year-old recruiter, soon realized prices had risen so much that homes no bigger than theirs were selling for $600,000. They couldn’t afford to upgrade, so instead they tore their home down and built a new 2,000-square-foot house.

“You always think this is my little tiny starter home,” she said. “Then the market starts changing, outpacing what your income is doing.”

But this isn’t just a problem in pricey coastal markets. Homeowners are staying longer in every one of the 55 metros that Redfin studied. Cities where it was once relatively easy to buy a home are seeing owners staying much longer, creating a serious inventory crunch.

The number of homes for sale ticked up last year and in the early part of this year, but in recent months it has dropped back down near the record lows hit in 2018.

The fall in inventory levels quickly damped hopes that the housing market would rebound in the second half of the year. The pace of existing home sales fell 2.2% in September, the National Association of Realtors reported last Tuesday.

The lack of mobility among homeowners isn’t the only reason why supply is tight. Since the recession, home construction hasn’t been keeping up with demand due to shortages of labor and land. The share of U.S. homes that are purchased by investors rose to an all-time high of 11% in 2018, according to CoreLogic. Some of those investors quickly flip those purchases, but others turn them into single-family rentals and hold on to them for years.

In Houston, homeowners are staying for more than 23 years, up from less than 15 years in 2010. Inventory in the same period has fallen 7%. One reason, real-estate agents and economists say, is that the warm local weather means few people leave the area when they retire.

The shortage of homes is especially acute in the Salt Lake City metropolitan area, where there are nearly 60% fewer homes for sale than there were nine years ago, according to Redfin.

Real-estate agents say that home prices in the area have risen so much that it is difficult for longtime residents to afford to move.

Around Salt Lake City, owners now typically remain in their homes for more than 23 years, or nearly nine years longer than they did in 2010, according to Redfin. The shortage of homes has helped drive the median home price up nearly 75% in the same period to around $340,000.

“It’s really a traffic jam,” said Daniel Lopez, a Redfin agent in Salt Lake City.

When Anjee Barber left San Diego to move to Salt Lake City, she and her partner thought it wouldn’t be hard to find a house.

The couple spent a year looking before they eventually found a five-bedroom, three-bathroom home with a small yard. When the sellers cut the price from $575,000 to $549,000, the couple made an offer and closed last week.

“This isn’t any easier than it would be in California,” she said.

Scott Robbins, president of the Salt Lake Board of Realtors, said he is working with a couple who is looking for a house close to downtown.

“On Saturday a new listing pops up and there’s 14 showings the first day because everybody is just waiting and waiting and waiting and boom,” he said. Trumponomics Causes U.S. Housing,Trumponomics Causes U.S. Housing,Trumponomics Causes U.S. Housing,Trumponomics Causes U.S. Housing,Trumponomics Causes U.S. Housing

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