REUTERS
"US single-family housing starts scale more than 1-1/2-year high"
By Lucia Mutikani
December 19, 2023
Summary
* Single-family housing starts rise 18.0% in November
* Single-family building permits up 0.7%
* Overall housing starts advance 14.8%; permits fall 2.5%
WASHINGTON, Dec 19 (Reuters) - U.S. single-family homebuilding surged to more than a 1-1/2-year high in November and could gain further momentum, with declining mortgage rates and incentives from builders likely to draw potential buyers back into the housing market.
The report from the Commerce Department on Tuesday also showed permits for future construction of single-family housing last month increased to the highest level since May 2022.
A jump in mortgage rates had dampened new construction activity in recent months.
The new housing market remains underpinned by an acute shortage of previously owned homes available for sale.
Economists raised their fourth-quarter gross domestic product growth estimates, and predicted that the housing market would help the economy avoid a recession next year.
"American housing demand is permanently higher than before the pandemic since people are spending more time at home," said Bill Adams, chief economist at Comerica Bank in Dallas.
"As long-term interest rates fall, builders will add more supply to the housing market to meet that demand, fueling economic growth."
Single-family housing starts, which account for the bulk of homebuilding, jumped 18.0% to a seasonally adjusted annual rate of 1.143 million units last month, the Commerce Department's Census Bureau said.
That was the highest level since April 2022.
Activity was also likely supported by mild temperatures and dry conditions.
Data for October was revised slightly lower to show single-family starts rising to a rate of 969,000 units instead of the previously reported 970,000 units.
Starts vaulted 42.2% on a year-on-year basis in November.
Single-family homebuilding soared in the Northeast, Midwest and the densely populated South.
It declined in the West.
The rate on the popular 30-year fixed mortgage averaged 6.95% last week, the lowest level since August, from 7.03% in the prior week, according to data from mortgage finance agency Freddie Mac.
It has tumbled from a 23-year high of 7.79% in late October, tracking the decline in U.S. Treasury yields.
The Federal Reserve held interest rates steady last week and policymakers signaled in new economic projections that the historic tightening of monetary policy engineered over the last two years is at an end and lower borrowing costs are coming in 2024.
A survey on Monday showed confidence among single-family builders rebounded from an 11-month low in December.
The National Association of Home Builders noted that "many builders continue to reduce home prices to boost sales."
Stocks on Wall Street were trading higher.
The dollar fell against a basket of currencies.
U.S. Treasury prices rose.
BUILDING PERMITS RISE
Permits for future construction of single-family homes increased 0.7% to a pace of 976,000 units last month, the highest in 1-1/2 years.
The strength in housing starts and permits bodes well for residential investment, which rebounded in the third quarter after nine straight quarterly decreases.
Economists at Goldman Sachs raised their fourth-quarter GDP growth estimate to a 1.7% annualized rate from a 1.5% pace.
The economy grew at a 5.2% rate in the third quarter.
The anticipated slowdown in growth this quarter is likely to reflect moderate consumer spending as well as drags from inventories and a wider trade deficit.
Starts for housing projects with five units or more rose 8.9% to a rate of 404,000 units in November.
Activity is, however, moderating as builders work through a large stock of apartment buildings under construction.
Demand for rental accommodation is also cooling, with the rental vacancy rate rising to more than a two-year high in the third quarter.
Increased supply of rental housing is one of the main factors expected to drive inflation lower next year.
Multi-family building permits dropped 9.6% to a rate of 435,000 units last month.
Overall housing starts soared 14.8% to a rate of 1.560 million units in November.
Economists polled by Reuters had forecast starts would fall to a rate of 1.360 million units from the previously reported 1.372 million units.
Building permits as a whole fell 2.5% to a rate of 1.460 million units last month.
The number of houses approved for construction that are yet to be started fell 2.5% to 276,000 units.
The single-family homebuilding backlog dropped 4.2% to 136,000 units, the lowest level since May.
The completions rate for that housing segment declined 3.2% to 960,000 units.
Overall housing completions rose 5.0% to a rate of 1.447 million units.
According to the National Association of Realtors, the inventory of previously owned homes on the market is just above 1 million units, well below nearly 2 million units before the COVID-19 pandemic.
Realtors estimate that housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to bridge the inventory gap.
The number of housing units under construction rose 0.7% to a rate of 1.685 million.
The inventory of single-family housing under construction increased 1.9% to a rate of 680,000 units.
The stock of multi-family housing under construction dipped 0.1% to 988,000 units, not far from recent record highs.
"The drag on GDP from weak residential investment is starting to diminish," said Jay Hawkins, a senior economist at BMO Capital Markets in Toronto.
"However, it will take some time to balance supply and demand and improve affordability."
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/markets/us/us-s ... 023-12-19/
THE HOUSING MARKET
Re: THE HOUSING MARKET
REUTERS
"Home prices continued climb in October, surveys show"
By Amina Niasse
December 26, 2023
NEW YORK, Dec 26 (Reuters) - Annual home prices in October rose again, pointing toward continued recovery of the housing market, data on Tuesday showed.
A Federal Housing Finance Agency (FHFA) report showed home prices grew 6.3% on a yearly basis, up from a revised 6.2% the month prior.
Annual price growth began to accelerate in June after declining steadily since February 2022.
Prices increased moderately by 0.3% on a month-to-month basis after climbing by 0.7% the month before.
Rates on the most common home loan neared 8% in October, reaching a two-decade high on the back of the Federal Reserve's rate hike cycle.
The Fed left its policy benchmark interest rate unchanged for three consecutive meetings, bolstering expectations of a closing rate hike cycle and stoking a rally in the bond market.
The average rate on a 30-year fixed-rate mortgage fell below 7% in December, as yields on mortgage-backed securities headed down.
Existing home sales have risen moderately since then, gaining 0.8% in November and indicating softening rates may draw sellers from the sidelines and open up inventory to prospective buyers, a National Association of Realtors report released in December showed.
"The lack of inventory in the housing market has continued to affect the sector and has reduced the effects of higher mortgage rates," said Eugenio Aleman, chief economist at Raymond James.
"This decline in mortgage rates is likely to push future HPI readings higher as more buyers enter the market and the supply of homes remains limited."
A separate national price index released by S&P Core Logic/Case-Shiller showed home prices gained by 4.8% on a yearly basis in October, the largest rate this year.
The Mid-Atlantic and New England regions experienced the largest gains in October, of 9.9% and 9.7%, respectively, according to the FHFA report.
On a city basis, Detroit and San Diego posted the largest annual growth in home prices, the Case-Shiller data showed.
Reporting by Amina Niasse; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/annu ... 023-12-26/
"Home prices continued climb in October, surveys show"
By Amina Niasse
December 26, 2023
NEW YORK, Dec 26 (Reuters) - Annual home prices in October rose again, pointing toward continued recovery of the housing market, data on Tuesday showed.
A Federal Housing Finance Agency (FHFA) report showed home prices grew 6.3% on a yearly basis, up from a revised 6.2% the month prior.
Annual price growth began to accelerate in June after declining steadily since February 2022.
Prices increased moderately by 0.3% on a month-to-month basis after climbing by 0.7% the month before.
Rates on the most common home loan neared 8% in October, reaching a two-decade high on the back of the Federal Reserve's rate hike cycle.
The Fed left its policy benchmark interest rate unchanged for three consecutive meetings, bolstering expectations of a closing rate hike cycle and stoking a rally in the bond market.
The average rate on a 30-year fixed-rate mortgage fell below 7% in December, as yields on mortgage-backed securities headed down.
Existing home sales have risen moderately since then, gaining 0.8% in November and indicating softening rates may draw sellers from the sidelines and open up inventory to prospective buyers, a National Association of Realtors report released in December showed.
"The lack of inventory in the housing market has continued to affect the sector and has reduced the effects of higher mortgage rates," said Eugenio Aleman, chief economist at Raymond James.
"This decline in mortgage rates is likely to push future HPI readings higher as more buyers enter the market and the supply of homes remains limited."
A separate national price index released by S&P Core Logic/Case-Shiller showed home prices gained by 4.8% on a yearly basis in October, the largest rate this year.
The Mid-Atlantic and New England regions experienced the largest gains in October, of 9.9% and 9.7%, respectively, according to the FHFA report.
On a city basis, Detroit and San Diego posted the largest annual growth in home prices, the Case-Shiller data showed.
Reporting by Amina Niasse; Editing by Chizu Nomiyama
https://www.reuters.com/markets/us/annu ... 023-12-26/
Re: THE HOUSING MARKET
REUTERS
"Contracts to buy US existing homes flat as mortgage payments soften"
By Amina Niasse
December 28, 2023
NEW YORK, Dec 28 (Reuters) - Pending U.S. home sales were unchanged in November, data released Thursday showed, signaling traffic from prospective buyers is slow to recover despite interest rates easing on the most common type of home loan.
An index gauging contracts to buy existing homes measured at 71.6 in November, level with October's revised reading, the National Association of Realtors (NAR) said.
Economists polled by Reuters expected an increase of 1%.
On a yearly basis, pending home sales have declined 5.2%.
"Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings,” said Lawrence Yun, chief economist at the NAR.
“With mortgage rates falling further in December – leading to savings of around $300 per month from the recent cyclical peak in rates – home sales will improve in 2024."
Mortgage interest rates climbed to nearly 8% in October, coinciding with the lowest reading of pending home sales since the index was created in 2001.
After the Federal Reserve left its benchmark policy rate unchanged again in November, the average 30-year fixed-rate mortgage fell to 6.61%, the lowest since May, for the week ended Dec. 28, Freddie Mac said.
Existing home sales fell precipitously this year from 2022 as high mortgage rates encouraged homeowners locked into cheaper rates to keep their homes, shortening inventory and eroding buyer traffic.
The West and Northeast regions experienced the biggest gain in contracts signed, by 4.2% and 0.8% respectively.
Pending home sales in the South fell by 2.3%.
Reporting by Amina Niasse; Editing by Chizu Nomiyama and Barbara Lewis
https://www.reuters.com/markets/us/cont ... 023-12-28/
"Contracts to buy US existing homes flat as mortgage payments soften"
By Amina Niasse
December 28, 2023
NEW YORK, Dec 28 (Reuters) - Pending U.S. home sales were unchanged in November, data released Thursday showed, signaling traffic from prospective buyers is slow to recover despite interest rates easing on the most common type of home loan.
An index gauging contracts to buy existing homes measured at 71.6 in November, level with October's revised reading, the National Association of Realtors (NAR) said.
Economists polled by Reuters expected an increase of 1%.
On a yearly basis, pending home sales have declined 5.2%.
"Although declining mortgage rates did not induce more homebuyers to submit formal contracts in November, it has sparked a surge in interest, as evidenced by a higher number of lockbox openings,” said Lawrence Yun, chief economist at the NAR.
“With mortgage rates falling further in December – leading to savings of around $300 per month from the recent cyclical peak in rates – home sales will improve in 2024."
Mortgage interest rates climbed to nearly 8% in October, coinciding with the lowest reading of pending home sales since the index was created in 2001.
After the Federal Reserve left its benchmark policy rate unchanged again in November, the average 30-year fixed-rate mortgage fell to 6.61%, the lowest since May, for the week ended Dec. 28, Freddie Mac said.
Existing home sales fell precipitously this year from 2022 as high mortgage rates encouraged homeowners locked into cheaper rates to keep their homes, shortening inventory and eroding buyer traffic.
The West and Northeast regions experienced the biggest gain in contracts signed, by 4.2% and 0.8% respectively.
Pending home sales in the South fell by 2.3%.
Reporting by Amina Niasse; Editing by Chizu Nomiyama and Barbara Lewis
https://www.reuters.com/markets/us/cont ... 023-12-28/
Re: THE HOUSING MARKET
REUTERS
"US consumer sentiment races to 2-1/2-year high; inflation expectations ease"
By Lucia Mutikani
January 20, 2024
Summary
* Consumer sentiment index rises 13% to 78.8 in January
* Inflation expectations edge lower from December
* Existing homes sales fall 1.0% in December; prices up
WASHINGTON, Jan 19 (Reuters) - U.S. consumer sentiment improved in January, hitting the highest level in 2-1/2 years amid growing optimism over the outlook for inflation and household incomes, which bodes well for the economy's prospects this year.
The better-than-expected reading in sentiment reported by the University of Michigan on Friday reflected a brightening of moods across all age and income groups, education and geographical locations as well as political affiliation.
It suggested that Americans were finally warming up to the economy's resilience after much anxiety over high inflation, which has weighed on President Joe Biden's popularity.
Consumers' inflation expectations over the next 12 months were the lowest in three years, good news for the Federal Reserve.
"The economy is not going backwards, it is going forwards at the start of 2024," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"For the first time, massive interest rate hikes have not put a damper on economic growth."
The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 78.8 this month, the highest reading since July 2021, compared to 69.7 in December.
Economists polled by Reuters had forecast a preliminary reading of 70.0.
It was the second straight monthly increase and occurred against the backdrop of a stock market rally, a fairly healthy labor market and gasoline prices that have held at lower levels.
The index has now rebounded nearly 60% after plumbing record lows in June 2022.
It is now just 7% shy of the historical average since 1978.
Joanne Hsu, the director of the University Of Michigan's Surveys of Consumers, noted that "Democrats and Republicans alike showed their most favorable readings since summer of 2021."
The survey's reading of one-year inflation expectations fell to 2.9% this month, the lowest level since December 2020.
That was down from 3.1% in December and put these inflation expectations within the 2.3%-3.0% range observed in the two years prior to the COVID-19 pandemic.
The survey's five-year inflation outlook slipped to 2.8% from 2.9% in the prior month.
They are now in the 2.9%-3.1% range seen for 26 of the last 30 months, but slightly higher relative to the 2.2%-2.6% band that prevailed in the two years before the pandemic.
Easing inflation expectations support economists' views that the U.S. central bank will start cutting interest rates in the first half of this year.
Since March 2022, the Fed has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range.
Though there is no strong correlation between sentiment and consumer spending, the main engine of the economy, the surge could help to allay fears of a recession.
Americans have maintained spending despite higher prices and borrowing costs as labor market tightness keeps wage growth elevated.
"Confidence alone is not a good indicator of where consumer spending is heading, but improved sentiment does reduce the risk that consumers increase their saving drastically this year, which is a key risk to our more upbeat outlook on consumer spending and GDP growth," said Grace Zwemmer, an economic research analyst at Oxford Economics.
Stocks on Wall Street were trading higher.
The dollar slipped against a basket of currencies.
U.S. Treasury prices fell.
HOME SALES FALL
A separate report on Friday from the National Association of Realtors showed existing home sales fell in December to the lowest level in nearly 13-1/2 years.
Home resales could, however, be close to turning the corner as mortgage rates decline and housing inventory shows signs of improving.
Existing home sales slipped 1.0% last month to a seasonally adjusted annual rate of 3.78 million units, the lowest level since August 2010.
Home resales are counted at the closing of a contract.
The sales in December likely reflected contracts signed in the prior two months, when the average rate on the popular 30-year fixed-rate mortgage was stuck above 7.0%.
The 30-year fixed-rate mortgage rate averaged 6.60% this week, an eight-month low, compared to 6.66% in the prior week, according to data from mortgage finance agency Freddie Mac.
Home resales, which account for a large portion of U.S. housing sales, dropped 18.7% to 4.09 million units in 2023, the lowest level since 1995.
There were 1.0 million previously owned homes on the market in December, up 4.2% from a year ago, but still below the nearly 2 million units before the pandemic.
At December's sales pace, it would take 3.2 months to exhaust the current inventory of existing homes, up from 2.9 months a year ago.
A four-to-seven-month supply is viewed as a healthy balance between supply and demand.
With supply still tight, the median existing home price increased 4.4% from a year earlier to $382,600 in December.
The pace of increase in house price inflation, however, slowed in the fourth quarter.
The median house price on an annual basis rose 0.9% to a record high of $389,800 in 2023.
"With mortgage rates now much lower, somewhat greater supply could support the level of sales into the first quarter as demand picks up," said Veronica Clark, an economist at Citigroup.
"We would also expect stronger demand to put further upward pressure on home prices after some slowing in the fourth quarter."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao
https://www.reuters.com/markets/us/us-c ... 024-01-19/
"US consumer sentiment races to 2-1/2-year high; inflation expectations ease"
By Lucia Mutikani
January 20, 2024
Summary
* Consumer sentiment index rises 13% to 78.8 in January
* Inflation expectations edge lower from December
* Existing homes sales fall 1.0% in December; prices up
WASHINGTON, Jan 19 (Reuters) - U.S. consumer sentiment improved in January, hitting the highest level in 2-1/2 years amid growing optimism over the outlook for inflation and household incomes, which bodes well for the economy's prospects this year.
The better-than-expected reading in sentiment reported by the University of Michigan on Friday reflected a brightening of moods across all age and income groups, education and geographical locations as well as political affiliation.
It suggested that Americans were finally warming up to the economy's resilience after much anxiety over high inflation, which has weighed on President Joe Biden's popularity.
Consumers' inflation expectations over the next 12 months were the lowest in three years, good news for the Federal Reserve.
"The economy is not going backwards, it is going forwards at the start of 2024," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"For the first time, massive interest rate hikes have not put a damper on economic growth."
The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 78.8 this month, the highest reading since July 2021, compared to 69.7 in December.
Economists polled by Reuters had forecast a preliminary reading of 70.0.
It was the second straight monthly increase and occurred against the backdrop of a stock market rally, a fairly healthy labor market and gasoline prices that have held at lower levels.
The index has now rebounded nearly 60% after plumbing record lows in June 2022.
It is now just 7% shy of the historical average since 1978.
Joanne Hsu, the director of the University Of Michigan's Surveys of Consumers, noted that "Democrats and Republicans alike showed their most favorable readings since summer of 2021."
The survey's reading of one-year inflation expectations fell to 2.9% this month, the lowest level since December 2020.
That was down from 3.1% in December and put these inflation expectations within the 2.3%-3.0% range observed in the two years prior to the COVID-19 pandemic.
The survey's five-year inflation outlook slipped to 2.8% from 2.9% in the prior month.
They are now in the 2.9%-3.1% range seen for 26 of the last 30 months, but slightly higher relative to the 2.2%-2.6% band that prevailed in the two years before the pandemic.
Easing inflation expectations support economists' views that the U.S. central bank will start cutting interest rates in the first half of this year.
Since March 2022, the Fed has hiked its policy rate by 525 basis points to the current 5.25%-5.50% range.
Though there is no strong correlation between sentiment and consumer spending, the main engine of the economy, the surge could help to allay fears of a recession.
Americans have maintained spending despite higher prices and borrowing costs as labor market tightness keeps wage growth elevated.
"Confidence alone is not a good indicator of where consumer spending is heading, but improved sentiment does reduce the risk that consumers increase their saving drastically this year, which is a key risk to our more upbeat outlook on consumer spending and GDP growth," said Grace Zwemmer, an economic research analyst at Oxford Economics.
Stocks on Wall Street were trading higher.
The dollar slipped against a basket of currencies.
U.S. Treasury prices fell.
HOME SALES FALL
A separate report on Friday from the National Association of Realtors showed existing home sales fell in December to the lowest level in nearly 13-1/2 years.
Home resales could, however, be close to turning the corner as mortgage rates decline and housing inventory shows signs of improving.
Existing home sales slipped 1.0% last month to a seasonally adjusted annual rate of 3.78 million units, the lowest level since August 2010.
Home resales are counted at the closing of a contract.
The sales in December likely reflected contracts signed in the prior two months, when the average rate on the popular 30-year fixed-rate mortgage was stuck above 7.0%.
The 30-year fixed-rate mortgage rate averaged 6.60% this week, an eight-month low, compared to 6.66% in the prior week, according to data from mortgage finance agency Freddie Mac.
Home resales, which account for a large portion of U.S. housing sales, dropped 18.7% to 4.09 million units in 2023, the lowest level since 1995.
There were 1.0 million previously owned homes on the market in December, up 4.2% from a year ago, but still below the nearly 2 million units before the pandemic.
At December's sales pace, it would take 3.2 months to exhaust the current inventory of existing homes, up from 2.9 months a year ago.
A four-to-seven-month supply is viewed as a healthy balance between supply and demand.
With supply still tight, the median existing home price increased 4.4% from a year earlier to $382,600 in December.
The pace of increase in house price inflation, however, slowed in the fourth quarter.
The median house price on an annual basis rose 0.9% to a record high of $389,800 in 2023.
"With mortgage rates now much lower, somewhat greater supply could support the level of sales into the first quarter as demand picks up," said Veronica Clark, an economist at Citigroup.
"We would also expect stronger demand to put further upward pressure on home prices after some slowing in the fourth quarter."
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Paul Simao
https://www.reuters.com/markets/us/us-c ... 024-01-19/
Re: THE HOUSING MARKET
REUTERS
"US seeks to crack down on real estate money laundering with new rule"
Reuters
February 7, 2024
WASHINGTON, Feb 7 (Reuters) - The U.S. Treasury Department's financial crimes unit on Wednesday proposed a long-awaited plan aimed at curbing the flow of illicit funds through American real estate markets.
The proposal, detailed by the Treasury Department's Financial Crimes Enforcement Network (FinCEN) on Wednesday, would require real estate professionals to flag suspicious activity seen in cash residential home purchases.
Title insurance companies, lawyers and certain other professionals involved in such deals would have to file reports for any non-financed sale or transfer of residential properties to an entity or trust, according to FinCEN's proposal.
If finalized, the new rule would replace a patchwork system that anti-corruption advocates have said has allowed bad actors to hide the proceeds of illicit activity by buying homes through legal entities or trusts, without financing.
Last year, Treasury Secretary Janet Yellen said that criminals for decades have anonymously hidden such ill-gotten gains in real estate, estimating $2.3 billion was laundered through U.S. real estate between 2015 and 2020.
Financial institutions have long been expected to flag suspicious activity to regulators, but cash real estate transactions generally have not been subject to such rules.
The new requirements would demand real estate professionals involved in such transactions collect and report data to FinCEN about the property being sold, the seller and the beneficial owner of any legal entity receiving the property.
Officials first said in 2021 that they planned to implement such a rule.
Anti-corruption advocates applauded Wednesday's proposal.
"This draft rule sends a clear message that the U.S. plans to close off options for criminals looking to hide their ill-gotten gains in our real estate markets,” Ian Gary, executive director of the nonpartisan FACT Coalition, said in a statement.
Reporting by Chris Prentice; Editing by Doina Chiacu and Emelia Sithole-Matarise
https://www.reuters.com/world/us/us-see ... 024-02-07/
"US seeks to crack down on real estate money laundering with new rule"
Reuters
February 7, 2024
WASHINGTON, Feb 7 (Reuters) - The U.S. Treasury Department's financial crimes unit on Wednesday proposed a long-awaited plan aimed at curbing the flow of illicit funds through American real estate markets.
The proposal, detailed by the Treasury Department's Financial Crimes Enforcement Network (FinCEN) on Wednesday, would require real estate professionals to flag suspicious activity seen in cash residential home purchases.
Title insurance companies, lawyers and certain other professionals involved in such deals would have to file reports for any non-financed sale or transfer of residential properties to an entity or trust, according to FinCEN's proposal.
If finalized, the new rule would replace a patchwork system that anti-corruption advocates have said has allowed bad actors to hide the proceeds of illicit activity by buying homes through legal entities or trusts, without financing.
Last year, Treasury Secretary Janet Yellen said that criminals for decades have anonymously hidden such ill-gotten gains in real estate, estimating $2.3 billion was laundered through U.S. real estate between 2015 and 2020.
Financial institutions have long been expected to flag suspicious activity to regulators, but cash real estate transactions generally have not been subject to such rules.
The new requirements would demand real estate professionals involved in such transactions collect and report data to FinCEN about the property being sold, the seller and the beneficial owner of any legal entity receiving the property.
Officials first said in 2021 that they planned to implement such a rule.
Anti-corruption advocates applauded Wednesday's proposal.
"This draft rule sends a clear message that the U.S. plans to close off options for criminals looking to hide their ill-gotten gains in our real estate markets,” Ian Gary, executive director of the nonpartisan FACT Coalition, said in a statement.
Reporting by Chris Prentice; Editing by Doina Chiacu and Emelia Sithole-Matarise
https://www.reuters.com/world/us/us-see ... 024-02-07/
Re: THE HOUSING MARKET
The Hollywood Reporter
"Beverly Hills in Crisis as Judge Mandates New Affordable Housing: 'People Are Furious'"
Story by Kevin Dolak
16 FEBRUARY 2024
For inhabitants of the country's most sought-after ZIP code, the unwelcome news came in December: In a move to pressure the city to zone for more affordable housing, a restrictive ruling by a Superior Court judge put a moratorium on Beverly Hills' right to approve any new home additions or project proposals by residents pending the approval of new homes for lower-income locals.
In this ultra-exclusive community, where home remodeling is practically a sport, the notion that all renovations - from simple kitchen remodels to multimillion-dollar grotto installations - would require the ushering in of outsiders, or be delayed indefinitely, brought a particular unease.
That unease has turned to outrage for many living in the 5.71 square miles that make up the famed city, where rents and mortgages are more than double the national average.
Following Superior Court Judge Curtis A. Kin's Dec. 23 ruling, the city now finds itself fully entrenched in a battle over what's become an urgent issue across many U.S. cities: the demand for significant and meaningful affordable housing projects.
Many residents - already wary of the added foot traffic that will follow the opening of the Wilshire/Rodeo Metro station - just want the status quo to remain in Beverly Hills.
Some argue that Beverly Hills simply does not have the space to accommodate any new housing at all - affordable or not.
"People are furious, they're infuriated that a judge has the right to put a moratorium on residents on something that's not their fight and not their fault," Aaron Kirman, a Beverly Hills resident who represents exclusive properties across L.A. and appears on CNBC's real estate reality series Listing Impossible, tells The Hollywood Reporter.
"The reality is, Beverly Hills doesn't have much land."
"I think that [Judge Kin] put everybody in a very complicated and compromising situation."
The notion that the city lacks for space is laughable to affordable housing advocates.
"Other cities may sort of have that argument - Beverly Hills definitely does not," says Matt Gelfand, in-house litigator for Californians for Homeownership, the group whose suit against the city led to Kin's ruling.
"There is plenty of interest and there are plenty of places to put it," he tells THR, adding that proposals to do just that have flooded in over the past months.
"Beverly Hills is obviously a job center."
"It's got enormous commercial use."
"So it needs to have housing."
The Dec. 23 building moratorium decision amounts to a judicial check on the city of Beverly Hills, which has failed, for decades, to submit a blueprint for affordable housing that the state deems adequate.
All California cities are required to submit a plan, known as the Housing Element, to the state every eight years outlining how they will accommodate a proportion of the population growth as California grapples with a statewide housing crisis.
In 2018, California ranked 49th in the U.S. in housing units per resident, with an estimated shortfall of about 3 million to 4 million homes.
Beverly Hills, a city of 32,400 residents who overwhelmingly live in single-family homes, has seen its population shrink slightly over the past half-century even as California's exploded, doubling to about 40 million.
For decades, the wealthy city has managed to resist change in the name of, as many residents still say, "preserving its character."
Beverly Hills has managed to maintain its cordon of chi-chi exclusivity in part because the Southern California Association of Governments, which distributes affordable housing projects throughout the region, long assigned the city a low number of required units.
In 2018, The New York Times reported that a measly three affordable housing projects were required of Beverly Hills.
That number has since risen after a more housing-hawkish legislature established a stricter set of rules around how unit requirements are distributed.
For the current eight-year cycle, Beverly Hills has been assigned a target of 3,104 additional homes.
Three-quarters of these must be earmarked for low- and middle-income residents.
In order to both reach the target number and maintain the city's "character-preserving" zoning, units were proposed in some of the city's fully leased office buildings and a local Jewish Community - even the headquarters of the Academy of Motion Pictures was included.
Alan Nissle, who heads residential and hospitality real estate development firm Wilshire Skyline, tells THR that Beverly Hills is stuck in an odd situation: If the city were to fully comply with California's laws, provide more housing, and do its part to help out with the ongoing housing crisis, it would ultimately compromise the essential quality it's so desperate to preserve, he says.
"[The city] needs to find a way to sufficiently address state needs without undermining its character," he tells THR by phone.
"And unfortunately, until now, it hasn't done enough, legally and politically, to address the state's concerns."
"As a result, its attempt to preserve that character has backfired."
Following Kin's moratorium, the city immediately issued a legal challenge to the ruling.
As a result, permits are still being approved as this all plays out.
But residents now fear another legal loophole will threaten Beverly Hills' exclusive status.
The Builder's Remedy Solution
The Housing Accountability Act, which passed in 2017 as California was in the midst of a years-long spike in population growth, limits local governments' ability to "deny, reduce the density of, or make infeasible housing development projects" that are otherwise consistent with local standards and fit the current needs.
The HAA includes the so-called "Builder's Remedy" solution, which says that a city or county cannot veto a proposed housing project if the city has not adopted a Housing Element that has been approved by the state.
Beverly Hills' ongoing failure to deliver a viable Housing Element blueprint has given hawkish real estate developers looking to build there, and build big, a rare opportunity.
Without a housing blueprint blessed by the state, officials have unlocked the HAA's full legal power and given developers a window to propose at least 14 tall residential buildings - structures widely loathed in Beverly Hills, where detached, single-family homes and the well-to-do people living inside are the norm.
Because these proposals reserve the required 20 percent of their units for lower income renters, the leadership in the city of Beverly Hills - aware of the optics of the situation and likely eager to appear compliant with state mandates - now seem to have little choice but to give these projects a green light.
Or perhaps the city of Beverly Hills will stand firm against the proposed high-rise projects - one of which is at 17 stories - that the Builder's Remedy solution has triggered.
After all, the city of Santa Monica managed to negotiate a settlement agreement with a developer who'd utilized the same Builder's Remedy process after the beachside city similarly failed to gain state approval for its own Housing Element.
And members of the Beverly Hills City Council, facing a March 5 election, might mostly be concerned with winning over angry voters who despise the idea of living beside high towers and among their new, less-affluent residents.
The city's latest revised Housing Element blueprint was set to be delivered to the state this week.
Having cursorily read the document, Gelfand tells THR that the new blueprint still doesn't meet a key legal standard in presenting evidence that the existing uses on the sites listed are going to discontinue.
Nissle, who also perused the blueprint, says that, though it is not necessarily a slam dunk for state approval, the revision reflects the city's due diligence and a genuine effort to meet the housing needs outlined by the state.
Recently, a plan from Nissle's firm - for a seven-story residential in an area of Beverly Hills zoned for three stories - was approved by the city in a vote of 5-0.
Of the 54 units in the building, six of them are earmarked for low-income residents.
This is well below 20 percent but, of course, higher than zero.
Is meeting regulatory authorities halfway a solution for Beverly Hills?
It certainly has the feel of a compromise - albeit one highly unlikely to bring in the thousands of affordable units needed and required.
For Beverly Hills, it seems the time has come to play catch-up with some of its neighbors - like it or not.
"If [Beverly Hills] is going to grow, it has to grow vertically," Nissle says.
"It's going the way of Hollywood and Santa Monica, for better or for worse."
"It's just the new reality of things."
https://www.msn.com/en-us/money/realest ... 7d50&ei=32
"Beverly Hills in Crisis as Judge Mandates New Affordable Housing: 'People Are Furious'"
Story by Kevin Dolak
16 FEBRUARY 2024
For inhabitants of the country's most sought-after ZIP code, the unwelcome news came in December: In a move to pressure the city to zone for more affordable housing, a restrictive ruling by a Superior Court judge put a moratorium on Beverly Hills' right to approve any new home additions or project proposals by residents pending the approval of new homes for lower-income locals.
In this ultra-exclusive community, where home remodeling is practically a sport, the notion that all renovations - from simple kitchen remodels to multimillion-dollar grotto installations - would require the ushering in of outsiders, or be delayed indefinitely, brought a particular unease.
That unease has turned to outrage for many living in the 5.71 square miles that make up the famed city, where rents and mortgages are more than double the national average.
Following Superior Court Judge Curtis A. Kin's Dec. 23 ruling, the city now finds itself fully entrenched in a battle over what's become an urgent issue across many U.S. cities: the demand for significant and meaningful affordable housing projects.
Many residents - already wary of the added foot traffic that will follow the opening of the Wilshire/Rodeo Metro station - just want the status quo to remain in Beverly Hills.
Some argue that Beverly Hills simply does not have the space to accommodate any new housing at all - affordable or not.
"People are furious, they're infuriated that a judge has the right to put a moratorium on residents on something that's not their fight and not their fault," Aaron Kirman, a Beverly Hills resident who represents exclusive properties across L.A. and appears on CNBC's real estate reality series Listing Impossible, tells The Hollywood Reporter.
"The reality is, Beverly Hills doesn't have much land."
"I think that [Judge Kin] put everybody in a very complicated and compromising situation."
The notion that the city lacks for space is laughable to affordable housing advocates.
"Other cities may sort of have that argument - Beverly Hills definitely does not," says Matt Gelfand, in-house litigator for Californians for Homeownership, the group whose suit against the city led to Kin's ruling.
"There is plenty of interest and there are plenty of places to put it," he tells THR, adding that proposals to do just that have flooded in over the past months.
"Beverly Hills is obviously a job center."
"It's got enormous commercial use."
"So it needs to have housing."
The Dec. 23 building moratorium decision amounts to a judicial check on the city of Beverly Hills, which has failed, for decades, to submit a blueprint for affordable housing that the state deems adequate.
All California cities are required to submit a plan, known as the Housing Element, to the state every eight years outlining how they will accommodate a proportion of the population growth as California grapples with a statewide housing crisis.
In 2018, California ranked 49th in the U.S. in housing units per resident, with an estimated shortfall of about 3 million to 4 million homes.
Beverly Hills, a city of 32,400 residents who overwhelmingly live in single-family homes, has seen its population shrink slightly over the past half-century even as California's exploded, doubling to about 40 million.
For decades, the wealthy city has managed to resist change in the name of, as many residents still say, "preserving its character."
Beverly Hills has managed to maintain its cordon of chi-chi exclusivity in part because the Southern California Association of Governments, which distributes affordable housing projects throughout the region, long assigned the city a low number of required units.
In 2018, The New York Times reported that a measly three affordable housing projects were required of Beverly Hills.
That number has since risen after a more housing-hawkish legislature established a stricter set of rules around how unit requirements are distributed.
For the current eight-year cycle, Beverly Hills has been assigned a target of 3,104 additional homes.
Three-quarters of these must be earmarked for low- and middle-income residents.
In order to both reach the target number and maintain the city's "character-preserving" zoning, units were proposed in some of the city's fully leased office buildings and a local Jewish Community - even the headquarters of the Academy of Motion Pictures was included.
Alan Nissle, who heads residential and hospitality real estate development firm Wilshire Skyline, tells THR that Beverly Hills is stuck in an odd situation: If the city were to fully comply with California's laws, provide more housing, and do its part to help out with the ongoing housing crisis, it would ultimately compromise the essential quality it's so desperate to preserve, he says.
"[The city] needs to find a way to sufficiently address state needs without undermining its character," he tells THR by phone.
"And unfortunately, until now, it hasn't done enough, legally and politically, to address the state's concerns."
"As a result, its attempt to preserve that character has backfired."
Following Kin's moratorium, the city immediately issued a legal challenge to the ruling.
As a result, permits are still being approved as this all plays out.
But residents now fear another legal loophole will threaten Beverly Hills' exclusive status.
The Builder's Remedy Solution
The Housing Accountability Act, which passed in 2017 as California was in the midst of a years-long spike in population growth, limits local governments' ability to "deny, reduce the density of, or make infeasible housing development projects" that are otherwise consistent with local standards and fit the current needs.
The HAA includes the so-called "Builder's Remedy" solution, which says that a city or county cannot veto a proposed housing project if the city has not adopted a Housing Element that has been approved by the state.
Beverly Hills' ongoing failure to deliver a viable Housing Element blueprint has given hawkish real estate developers looking to build there, and build big, a rare opportunity.
Without a housing blueprint blessed by the state, officials have unlocked the HAA's full legal power and given developers a window to propose at least 14 tall residential buildings - structures widely loathed in Beverly Hills, where detached, single-family homes and the well-to-do people living inside are the norm.
Because these proposals reserve the required 20 percent of their units for lower income renters, the leadership in the city of Beverly Hills - aware of the optics of the situation and likely eager to appear compliant with state mandates - now seem to have little choice but to give these projects a green light.
Or perhaps the city of Beverly Hills will stand firm against the proposed high-rise projects - one of which is at 17 stories - that the Builder's Remedy solution has triggered.
After all, the city of Santa Monica managed to negotiate a settlement agreement with a developer who'd utilized the same Builder's Remedy process after the beachside city similarly failed to gain state approval for its own Housing Element.
And members of the Beverly Hills City Council, facing a March 5 election, might mostly be concerned with winning over angry voters who despise the idea of living beside high towers and among their new, less-affluent residents.
The city's latest revised Housing Element blueprint was set to be delivered to the state this week.
Having cursorily read the document, Gelfand tells THR that the new blueprint still doesn't meet a key legal standard in presenting evidence that the existing uses on the sites listed are going to discontinue.
Nissle, who also perused the blueprint, says that, though it is not necessarily a slam dunk for state approval, the revision reflects the city's due diligence and a genuine effort to meet the housing needs outlined by the state.
Recently, a plan from Nissle's firm - for a seven-story residential in an area of Beverly Hills zoned for three stories - was approved by the city in a vote of 5-0.
Of the 54 units in the building, six of them are earmarked for low-income residents.
This is well below 20 percent but, of course, higher than zero.
Is meeting regulatory authorities halfway a solution for Beverly Hills?
It certainly has the feel of a compromise - albeit one highly unlikely to bring in the thousands of affordable units needed and required.
For Beverly Hills, it seems the time has come to play catch-up with some of its neighbors - like it or not.
"If [Beverly Hills] is going to grow, it has to grow vertically," Nissle says.
"It's going the way of Hollywood and Santa Monica, for better or for worse."
"It's just the new reality of things."
https://www.msn.com/en-us/money/realest ... 7d50&ei=32
Re: THE HOUSING MARKET
REUTERS
"Strong services price increases lift US producer inflation in January"
By Lucia Mutikani
February 16, 2024
Summary
* Producer price index increases 0.3% in January
* PPI rises 0.9% year-on-year
* PPI excluding food, energy and trade jumps 0.6%
* Single-family housing starts drop 4.7%; permits rise 1.6%
WASHINGTON, Feb 16 (Reuters) - U.S. producer prices increased more than expected in January amid strong gains in the costs of services such as hospital outpatient care and portfolio management, stoking financial market fears inflation was picking up after months of cooling.
The increase reported by the Labor Department on Friday was the largest in five months.
The report followed on the heels of an above-expectations rise in consumer prices in January and prompted financial markets to dial back expectations that the Federal Reserve would start cutting interest rates in June.
Data on Thursday also showed prices of imported goods surging in January.
But some economists cautioned against concluding that inflation was re-accelerating noting that businesses typically raise prices at the start of the year.
These price hikes probably were larger this year as businesses tried to make up for higher labor costs in the past year.
Economists also suspected that the model used by the government to strip out seasonal fluctuations from the data could be falling short.
Nevertheless, the reports this week raised the risk of higher readings in the personal consumption expenditures (PCE) price indexes, the measures tracked by the U.S. central bank for its 2% inflation target, when the government publishes January's data later this month.
"The Fed isn't losing the inflation fight, but they aren't winning either," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"The data are consistent, that January is a problem month for inflation."
"There could be some seasonal adjustment problems as prices move up the most each year in the dead of winter."
The producer price index for final demand rose 0.3% last month, the largest increase since August 2023, after declining by a revised 0.1% in December, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI gaining 0.1% following a previously reported 0.2% drop.
In the 12 months through January, the PPI increased 0.9% after climbing 1.0% in December.
Services increased 0.6%, the largest rise since July 2023, boosted by a 2.2% jump in hospital outpatient care.
The surge in these costs was attributed to strong wage increases over the past year.
Portfolio management fees surged 5.5%, likely driven by higher stock market prices.
There were also increases in wholesale prices of hotel and motel rooms as well as legal services.
But the cost of transporting freight by road decreased 1.0%.
Services, at the core of the fight against inflation, dropped 0.1% in December.
"We would not dismiss strength in January services prices as a one-off phenomenon," said Veronica Clark, an economist at Citigroup in New York.
"This upward pressure can continue, especially for sectors like medical services that still face tight labor markets."
Wholesale goods prices fell 0.2%, declining for the fourth straight month.
Food prices dropped 0.3%, while the cost of energy plummeted 1.7%.
Excluding food and energy, goods prices rose 0.3%.
The so-called core goods prices gained 0.1% in December.
Portfolio management fees, healthcare, hotel and motel accommodation, and airline fares are among components that go into the calculation of the PCE price indexes.
Based on the CPI and PPI data, economists estimated the PCE price index excluding food and energy increased 0.4% in January, with the risk of rounding up to 0.5%.
The core PCE price index climbed 0.2% in December.
In the 12 months through January, core inflation was forecast increasing 2.9%, matching December's advance.
Stocks on Wall Street were trading lower.
The dollar was steady versus a basket of currencies.
U.S. Treasury prices fell.
HOUSING STARTS FALL
Financial markets still expect the Fed to deliver its first rate cut this year, though the odds of a move in June are diminishing.
Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The narrower measure of PPI, which strips out food, energy and trade services components, jumped 0.6% in January.
That was the biggest increase in a year a followed a 0.2% gain in December.
The core PPI rose 2.6% on a year-on-year basis, matching December's gain.
The spate of disappointing January data extended to the housing market.
A separate report from the Commerce Department showed single-family homebuilding fell last month, likely because of harsh weather, but a rise in permits for future construction suggested a rebound in the coming months.
Single-family housing starts, which account for the bulk of homebuilding, dropped 4.7% to a seasonally adjusted annual rate of 1.004 million units last month, the Commerce Department's Census Bureau said.
Homebuilding remains supported by an acute shortage of previously owned houses on the market.
Extremely cold weather across much of the country during the month likely made it difficult to break ground on new projects.
The below-normal temperatures helped to depress retail sales and manufacturing production in January.
Permits for future construction of single-family homes increased 1.6% to a pace of 1.015 million units, the highest level in nearly two years.
They have increased for 12 straight months.
Starts for housing projects with five units or more plunged 35.8% to a rate of 314,000 units in January.
Multi-family building permits dropped 9.0% to a rate of 405,000 units last month.
There remains a huge backlog of multi-family housing under construction.
"Clearly, builders are currently far more focused on filling the gap left by the shortage of single-family housing than they are on building apartments," said Daniel Vielhaber, an economist at Nationwide in Columbus, Ohio.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-p ... 024-02-16/
"Strong services price increases lift US producer inflation in January"
By Lucia Mutikani
February 16, 2024
Summary
* Producer price index increases 0.3% in January
* PPI rises 0.9% year-on-year
* PPI excluding food, energy and trade jumps 0.6%
* Single-family housing starts drop 4.7%; permits rise 1.6%
WASHINGTON, Feb 16 (Reuters) - U.S. producer prices increased more than expected in January amid strong gains in the costs of services such as hospital outpatient care and portfolio management, stoking financial market fears inflation was picking up after months of cooling.
The increase reported by the Labor Department on Friday was the largest in five months.
The report followed on the heels of an above-expectations rise in consumer prices in January and prompted financial markets to dial back expectations that the Federal Reserve would start cutting interest rates in June.
Data on Thursday also showed prices of imported goods surging in January.
But some economists cautioned against concluding that inflation was re-accelerating noting that businesses typically raise prices at the start of the year.
These price hikes probably were larger this year as businesses tried to make up for higher labor costs in the past year.
Economists also suspected that the model used by the government to strip out seasonal fluctuations from the data could be falling short.
Nevertheless, the reports this week raised the risk of higher readings in the personal consumption expenditures (PCE) price indexes, the measures tracked by the U.S. central bank for its 2% inflation target, when the government publishes January's data later this month.
"The Fed isn't losing the inflation fight, but they aren't winning either," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"The data are consistent, that January is a problem month for inflation."
"There could be some seasonal adjustment problems as prices move up the most each year in the dead of winter."
The producer price index for final demand rose 0.3% last month, the largest increase since August 2023, after declining by a revised 0.1% in December, the Labor Department's Bureau of Labor Statistics said.
Economists polled by Reuters had forecast the PPI gaining 0.1% following a previously reported 0.2% drop.
In the 12 months through January, the PPI increased 0.9% after climbing 1.0% in December.
Services increased 0.6%, the largest rise since July 2023, boosted by a 2.2% jump in hospital outpatient care.
The surge in these costs was attributed to strong wage increases over the past year.
Portfolio management fees surged 5.5%, likely driven by higher stock market prices.
There were also increases in wholesale prices of hotel and motel rooms as well as legal services.
But the cost of transporting freight by road decreased 1.0%.
Services, at the core of the fight against inflation, dropped 0.1% in December.
"We would not dismiss strength in January services prices as a one-off phenomenon," said Veronica Clark, an economist at Citigroup in New York.
"This upward pressure can continue, especially for sectors like medical services that still face tight labor markets."
Wholesale goods prices fell 0.2%, declining for the fourth straight month.
Food prices dropped 0.3%, while the cost of energy plummeted 1.7%.
Excluding food and energy, goods prices rose 0.3%.
The so-called core goods prices gained 0.1% in December.
Portfolio management fees, healthcare, hotel and motel accommodation, and airline fares are among components that go into the calculation of the PCE price indexes.
Based on the CPI and PPI data, economists estimated the PCE price index excluding food and energy increased 0.4% in January, with the risk of rounding up to 0.5%.
The core PCE price index climbed 0.2% in December.
In the 12 months through January, core inflation was forecast increasing 2.9%, matching December's advance.
Stocks on Wall Street were trading lower.
The dollar was steady versus a basket of currencies.
U.S. Treasury prices fell.
HOUSING STARTS FALL
Financial markets still expect the Fed to deliver its first rate cut this year, though the odds of a move in June are diminishing.
Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The narrower measure of PPI, which strips out food, energy and trade services components, jumped 0.6% in January.
That was the biggest increase in a year a followed a 0.2% gain in December.
The core PPI rose 2.6% on a year-on-year basis, matching December's gain.
The spate of disappointing January data extended to the housing market.
A separate report from the Commerce Department showed single-family homebuilding fell last month, likely because of harsh weather, but a rise in permits for future construction suggested a rebound in the coming months.
Single-family housing starts, which account for the bulk of homebuilding, dropped 4.7% to a seasonally adjusted annual rate of 1.004 million units last month, the Commerce Department's Census Bureau said.
Homebuilding remains supported by an acute shortage of previously owned houses on the market.
Extremely cold weather across much of the country during the month likely made it difficult to break ground on new projects.
The below-normal temperatures helped to depress retail sales and manufacturing production in January.
Permits for future construction of single-family homes increased 1.6% to a pace of 1.015 million units, the highest level in nearly two years.
They have increased for 12 straight months.
Starts for housing projects with five units or more plunged 35.8% to a rate of 314,000 units in January.
Multi-family building permits dropped 9.0% to a rate of 405,000 units last month.
There remains a huge backlog of multi-family housing under construction.
"Clearly, builders are currently far more focused on filling the gap left by the shortage of single-family housing than they are on building apartments," said Daniel Vielhaber, an economist at Nationwide in Columbus, Ohio.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-p ... 024-02-16/
Re: THE HOUSING MARKET
REUTERS
"US weekly jobless claims fall as labor market remains tight"
By Lucia Mutikani
February 22, 2024
Summary
* Weekly jobless claims fall 12,000 to 201,000
* Continuing claims decline 27,000 to 1.862 million
* Existing home sales increase 3.1% in January
* Median house price rises 5.1% to $379,100 from year ago
WASHINGTON, Feb 22 (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth likely remained solid in February.
Labor market resilience, which is underpinning the economy, reduces the urgency for the Federal Reserve to start cutting interest rates.
Minutes of the U.S. central bank's Jan. 30-31 meeting published on Wednesday showed the majority of policymakers were concerned about the risks of cutting rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level.
"Job layoffs remain minimal so wage pressures from a tight labor market will continue to push off the day when Fed officials can safely lower interest rates without reigniting inflation," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"The key economic indicator of whether the economy is slowing down has been and always will be job losses."
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 201,000 for the week ended Feb. 17, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 218,000 claims for the latest week.
Claims are hovering at historically low levels, despite high-profile layoffs at the start of the year.
Unadjusted claims declined 26,053 to 197,932 last week, the lowest level since last October.
Claims in California, which were estimated by the state likely because of the holiday-shortened week, plunged 8,584.
There were notable decreases in applications in Illinois, Kentucky, Michigan, New York and Texas.
Kentucky had seen a jump in filings in the prior week, attributed to layoffs in the automobile manufacturing and wholesale trade industries.
Difficulties finding labor during and after the COVID-19 pandemic have generally left employers reluctant to reduce head count.
Worker productivity has also risen while the economy continues to expand despite the Fed's aggressive monetary policy stance.
Policymakers at last month's meeting continued to view the labor market as "tight," the minutes showed, but several "noted that recent job gains were concentrated in a few sectors, which, in their view, pointed to downside risks to the outlook for employment."
Stocks on Wall Street were trading higher.
The dollar was steady against a basket of currencies.
U.S. Treasury prices were mostly lower.
HOUSING GREEN SHOOTS
Financial markets have pushed back their expectations for the first rate cut from the Fed to June from May, in the wake of strong job gains in January as well as firmer-than-expected inflation readings at the start of the year.
Inflation is, however, likely on a downward trend.
A survey from S&P Global on Thursday showed business activity cooled in February, with a measure of prices paid for inputs falling to the lowest level in nearly 3-1/2 years.
A slowdown in services industry growth, the focus of the inflation battle, accounted for the fall in the S&P Global's flash U.S. Composite PMI Output Index to 51.4 this month from 52.0 in January.
A reading above 50 indicates expansion in the private sector.
Since March 2022, the central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of February's employment report.
Claims rose marginally between the January and February survey periods.
The economy added 353,000 jobs in January.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 27,000 to 1.862 million during the week ending Feb. 10, the claims report showed.
The so-called continuing claims are running a bit higher than their average in 2019, which economists suggested some loosening in labor market conditions.
But the insured unemployment rate dipped to 1.2% from 1.3% in the prior week, underscoring the labor market's tightness.
"Overall, the labor market remains strong although there is a gradual rebalancing of supply and demand for workers, welcome news for policymakers, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
There were signs of green shoots in the housing market, the sector that has borne the brunt of higher borrowing costs, though tight inventory remains a barrier for first-time buyers.
Existing home sales increased 3.1% in January to a seasonally adjusted annual rate of 4.00 million units, the highest level since last August, the National Association of Realtors said in a third report.
Buyers took advantage of a retreat in mortgages rates and modest improvement in supply.
The bulk of sales were in the $750,000-$1.0 million and over price bracket, where there is more inventory.
Sales of houses below $250,000, considered entry-level homes, remain depressed.
The median existing home price rose 5.1% from a year earlier to $379,100 in January, the highest on record for any January, with multiple offers the norm on mid-priced homes.
All cash sales accounted for 32% of transactions last month, the largest share since June 2014.
"We'll need a combination of lower mortgage rates, price stability if not price drops, and accelerated building to help return the total home sales market back to normal," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-w ... 024-02-22/
"US weekly jobless claims fall as labor market remains tight"
By Lucia Mutikani
February 22, 2024
Summary
* Weekly jobless claims fall 12,000 to 201,000
* Continuing claims decline 27,000 to 1.862 million
* Existing home sales increase 3.1% in January
* Median house price rises 5.1% to $379,100 from year ago
WASHINGTON, Feb 22 (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting that job growth likely remained solid in February.
Labor market resilience, which is underpinning the economy, reduces the urgency for the Federal Reserve to start cutting interest rates.
Minutes of the U.S. central bank's Jan. 30-31 meeting published on Wednesday showed the majority of policymakers were concerned about the risks of cutting rates too soon, with broad uncertainty about how long borrowing costs should remain at their current level.
"Job layoffs remain minimal so wage pressures from a tight labor market will continue to push off the day when Fed officials can safely lower interest rates without reigniting inflation," said Christopher Rupkey, chief economist at FWDBONDS in New York.
"The key economic indicator of whether the economy is slowing down has been and always will be job losses."
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 201,000 for the week ended Feb. 17, the Labor Department said on Thursday.
Economists polled by Reuters had forecast 218,000 claims for the latest week.
Claims are hovering at historically low levels, despite high-profile layoffs at the start of the year.
Unadjusted claims declined 26,053 to 197,932 last week, the lowest level since last October.
Claims in California, which were estimated by the state likely because of the holiday-shortened week, plunged 8,584.
There were notable decreases in applications in Illinois, Kentucky, Michigan, New York and Texas.
Kentucky had seen a jump in filings in the prior week, attributed to layoffs in the automobile manufacturing and wholesale trade industries.
Difficulties finding labor during and after the COVID-19 pandemic have generally left employers reluctant to reduce head count.
Worker productivity has also risen while the economy continues to expand despite the Fed's aggressive monetary policy stance.
Policymakers at last month's meeting continued to view the labor market as "tight," the minutes showed, but several "noted that recent job gains were concentrated in a few sectors, which, in their view, pointed to downside risks to the outlook for employment."
Stocks on Wall Street were trading higher.
The dollar was steady against a basket of currencies.
U.S. Treasury prices were mostly lower.
HOUSING GREEN SHOOTS
Financial markets have pushed back their expectations for the first rate cut from the Fed to June from May, in the wake of strong job gains in January as well as firmer-than-expected inflation readings at the start of the year.
Inflation is, however, likely on a downward trend.
A survey from S&P Global on Thursday showed business activity cooled in February, with a measure of prices paid for inputs falling to the lowest level in nearly 3-1/2 years.
A slowdown in services industry growth, the focus of the inflation battle, accounted for the fall in the S&P Global's flash U.S. Composite PMI Output Index to 51.4 this month from 52.0 in January.
A reading above 50 indicates expansion in the private sector.
Since March 2022, the central bank has raised its policy rate by 525 basis points to the current 5.25%-5.50% range.
The claims data covered the period during which the government surveyed businesses for the nonfarm payrolls component of February's employment report.
Claims rose marginally between the January and February survey periods.
The economy added 353,000 jobs in January.
The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 27,000 to 1.862 million during the week ending Feb. 10, the claims report showed.
The so-called continuing claims are running a bit higher than their average in 2019, which economists suggested some loosening in labor market conditions.
But the insured unemployment rate dipped to 1.2% from 1.3% in the prior week, underscoring the labor market's tightness.
"Overall, the labor market remains strong although there is a gradual rebalancing of supply and demand for workers, welcome news for policymakers, said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
There were signs of green shoots in the housing market, the sector that has borne the brunt of higher borrowing costs, though tight inventory remains a barrier for first-time buyers.
Existing home sales increased 3.1% in January to a seasonally adjusted annual rate of 4.00 million units, the highest level since last August, the National Association of Realtors said in a third report.
Buyers took advantage of a retreat in mortgages rates and modest improvement in supply.
The bulk of sales were in the $750,000-$1.0 million and over price bracket, where there is more inventory.
Sales of houses below $250,000, considered entry-level homes, remain depressed.
The median existing home price rose 5.1% from a year earlier to $379,100 in January, the highest on record for any January, with multiple offers the norm on mid-priced homes.
All cash sales accounted for 32% of transactions last month, the largest share since June 2014.
"We'll need a combination of lower mortgage rates, price stability if not price drops, and accelerated building to help return the total home sales market back to normal," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
Reporting by Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/markets/us/us-w ... 024-02-22/
Re: THE HOUSING MARKET
REUTERS
"US new home sales rise less than expected in January"
By Lucia Mutikani
February 26, 2024
Summary
* New home sales increase 1.5% in January
* Median new house price falls 2.6% to $420,700 from year ago
WASHINGTON, Feb 26 (Reuters) - Sales of new U.S. single-family homes rose less than expected in January amid a sharp decline in the South region, but demand for new construction remains underpinned by a persistent shortage of previously owned homes.
New home sales increased 1.5% to a seasonally adjusted annual rate of 661,000 units last month, the Commerce Department's Census Bureau said on Monday.
The sales pace for December was revised lower to 651,000 units from the previously reported 664,000 units.
"The new side of the housing market continues to greatly outperform when measured against the market for existing homes," said Daniel Vielhaber, an economist at Nationwide.
"As the existing home inventory shortage persists, buyers continue to be pushed into the market for new homes."
Economists polled by Reuters had forecast new home sales, which account for about 14.2% of U.S. home sales, would rise to a rate of 680,000 units.
Large parts of the country experienced freezing temperatures in January, which could have kept some potential buyers home.
The frigid weather weighed on retail sales, homebuilding and factory production in January.
New home sales are counted at the signing of a contract, making them a leading indicator of the housing market.
They, however, can be volatile on a month-to-month basis.
Sales rose 1.8% on a year-on-year basis in January.
Monthly sales soared 72.0% in the Northeast and surged 38.7% in the West.
They rose 7.7% in the Midwest.
Sales in the densely populated South plunged 15.6% to the lowest level since September 2022.
A survey from the National Homebuilders Association last week showed measures of sales over the next six months and prospective buyers rising to six-month highs in February.
But home sales could remain moderate in the coming months as mortgage rates have resumed their upward trend after financial markets pushed back expectations for the first Federal Reserve interest rate cut to June from May.
'LOCK-IN' EFFECT
Nonetheless, economists still expect mortgage rates to trend lower this year.
That, together with the existing homes crunch as many homeowners hold mortgage rates below 4%, suggests the new housing market has further room to run.
"The bigger picture is that we think mortgage rate 'lock-in' is here to stay, which should continue to act as a tailwind for the new homes market," said Thomas Ryan, property economist at Capital Economics.
The average rate on the popular 30-year fixed-rate mortgage rose to 6.90% last week from 6.77% in the prior week, according to data from mortgage finance agency Freddie Mac.
It has risen from 6.62% at the beginning of the year, but is down from 7.79% in late October, which was the highest level since 2000.
The median new house price in January was $420,700, a 2.6% decrease from a year ago.
The pace of decline has, however, slowed as builders pull back on incentives, including price cuts.
The NAHB survey showed the share of builders reporting offering price reductions dropped to 25% in February from 31% in January and 36% in the last two months of 2023.
Most of the homes sold last month were in the $300,000-$749,000 price range.
There were 456,000 new homes on the market at the end of January, up from 452,000 in December.
At January's sales pace it would take 8.3 months to clear the supply of houses on the market, unchanged from December.
Houses under construction accounted for 59.2% of inventory.
Homes yet to be built made up 23.2% of supply, while completed houses accounted for 17.5%.
Reporting by Lucia Mutikani; Editing by Andrea Ricci and Paul Simao
https://www.reuters.com/world/us/us-new ... 024-02-26/
"US new home sales rise less than expected in January"
By Lucia Mutikani
February 26, 2024
Summary
* New home sales increase 1.5% in January
* Median new house price falls 2.6% to $420,700 from year ago
WASHINGTON, Feb 26 (Reuters) - Sales of new U.S. single-family homes rose less than expected in January amid a sharp decline in the South region, but demand for new construction remains underpinned by a persistent shortage of previously owned homes.
New home sales increased 1.5% to a seasonally adjusted annual rate of 661,000 units last month, the Commerce Department's Census Bureau said on Monday.
The sales pace for December was revised lower to 651,000 units from the previously reported 664,000 units.
"The new side of the housing market continues to greatly outperform when measured against the market for existing homes," said Daniel Vielhaber, an economist at Nationwide.
"As the existing home inventory shortage persists, buyers continue to be pushed into the market for new homes."
Economists polled by Reuters had forecast new home sales, which account for about 14.2% of U.S. home sales, would rise to a rate of 680,000 units.
Large parts of the country experienced freezing temperatures in January, which could have kept some potential buyers home.
The frigid weather weighed on retail sales, homebuilding and factory production in January.
New home sales are counted at the signing of a contract, making them a leading indicator of the housing market.
They, however, can be volatile on a month-to-month basis.
Sales rose 1.8% on a year-on-year basis in January.
Monthly sales soared 72.0% in the Northeast and surged 38.7% in the West.
They rose 7.7% in the Midwest.
Sales in the densely populated South plunged 15.6% to the lowest level since September 2022.
A survey from the National Homebuilders Association last week showed measures of sales over the next six months and prospective buyers rising to six-month highs in February.
But home sales could remain moderate in the coming months as mortgage rates have resumed their upward trend after financial markets pushed back expectations for the first Federal Reserve interest rate cut to June from May.
'LOCK-IN' EFFECT
Nonetheless, economists still expect mortgage rates to trend lower this year.
That, together with the existing homes crunch as many homeowners hold mortgage rates below 4%, suggests the new housing market has further room to run.
"The bigger picture is that we think mortgage rate 'lock-in' is here to stay, which should continue to act as a tailwind for the new homes market," said Thomas Ryan, property economist at Capital Economics.
The average rate on the popular 30-year fixed-rate mortgage rose to 6.90% last week from 6.77% in the prior week, according to data from mortgage finance agency Freddie Mac.
It has risen from 6.62% at the beginning of the year, but is down from 7.79% in late October, which was the highest level since 2000.
The median new house price in January was $420,700, a 2.6% decrease from a year ago.
The pace of decline has, however, slowed as builders pull back on incentives, including price cuts.
The NAHB survey showed the share of builders reporting offering price reductions dropped to 25% in February from 31% in January and 36% in the last two months of 2023.
Most of the homes sold last month were in the $300,000-$749,000 price range.
There were 456,000 new homes on the market at the end of January, up from 452,000 in December.
At January's sales pace it would take 8.3 months to clear the supply of houses on the market, unchanged from December.
Houses under construction accounted for 59.2% of inventory.
Homes yet to be built made up 23.2% of supply, while completed houses accounted for 17.5%.
Reporting by Lucia Mutikani; Editing by Andrea Ricci and Paul Simao
https://www.reuters.com/world/us/us-new ... 024-02-26/
Re: THE HOUSING MARKET
REUTERS
"US mortgage rates rise for a fourth-straight week, Freddie Mac says"
By Amina Niasse
February 29, 2024
NEW YORK, Feb 29 (Reuters) - U.S. mortgage rates rose for a fourth-straight week, Freddie Mac reported on Thursday, reaching a two-month high and again becoming a factor impeding traffic among rate-sensitive prospective home buyers.
The average rate on a 30-year fixed-rate mortgage ticked up to 6.94% for the week ended Feb. 29 from 6.90% the week prior, the report said.
“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying."
"While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines," said Sam Khater, Freddie Mac’s chief economist.
The rate remains below two-decade highs near 8% reached in October.
The Federal Reserve has held its benchmark policy rate unchanged since July, and rates tracked by Freddie Mac have held below 7% since December.
High mortgage rates eroded buyer traffic last year as tight inventory and home price gains limited affordability.
Home sales remain under pressure, with pending home sales retreating by 4.9% in January, according to National Association of Realtors data.
Reporting by Amina Niasse; Editing by Chris Reese
https://www.reuters.com/markets/us/us-m ... 024-02-29/
"US mortgage rates rise for a fourth-straight week, Freddie Mac says"
By Amina Niasse
February 29, 2024
NEW YORK, Feb 29 (Reuters) - U.S. mortgage rates rose for a fourth-straight week, Freddie Mac reported on Thursday, reaching a two-month high and again becoming a factor impeding traffic among rate-sensitive prospective home buyers.
The average rate on a 30-year fixed-rate mortgage ticked up to 6.94% for the week ended Feb. 29 from 6.90% the week prior, the report said.
“The recent boomerang in rates has dampened already tentative homebuyer momentum as we approach the spring, a historically busy season for homebuying."
"While sales of newly built homes are trending in a positive direction, higher rates and elevated prices continue to pose affordability challenges that may leave potential homebuyers on the sidelines," said Sam Khater, Freddie Mac’s chief economist.
The rate remains below two-decade highs near 8% reached in October.
The Federal Reserve has held its benchmark policy rate unchanged since July, and rates tracked by Freddie Mac have held below 7% since December.
High mortgage rates eroded buyer traffic last year as tight inventory and home price gains limited affordability.
Home sales remain under pressure, with pending home sales retreating by 4.9% in January, according to National Association of Realtors data.
Reporting by Amina Niasse; Editing by Chris Reese
https://www.reuters.com/markets/us/us-m ... 024-02-29/