FOX BUSINESS NEWS
"NAHB CEO gives grim assessment of housing market: 'We've given birth to a housing recession'"
Fox Business
19 SEPTEMBER 2022
National Association of Home Builders CEO Jerry Howard warned the housing market will continue to decline and is likely to "stay at bottom" until the midterm elections, telling "Varney & Co." Monday that policymakers could cure the current housing recession.
JERRY HOWARD: It’s a real bad time.
Nine straight months down, we’ve given birth to a housing recession.
This recession could be cured by policymakers, so I expect we’ll stay at the bottom, and maybe go a little lower, right up until we see the outcome of the midterm elections - because policy is what can get us out of this.
I think you’re seeing a weakening in virtually every market but those that were stronger are weakening less.
I guess the most important thing that investors and people need to remember is that Americans still want to own their homes and that, as soon as the conditions turn a little more favorable, housing will pick up.
That will pick up the whole economy.
https://www.msn.com/en-us/money/realest ... f35c696ffa
THE HOUSING MARKET
Re: THE HOUSING MARKET
REUTERS
"Fed's Powell: U.S. housing market headed for 'correction'"
By Reuters Staff
SEPTEMBER 21, 2022
(Reuters) - Federal Reserve Chair Jerome Powell on Wednesday said the U.S. housing market will probably go through a “correction” after a period of “red hot” price increases that have put home ownership out of reach for many Americans.
“There was a big imbalance ... housing prices were going up at an unsustainably fast level,” Powell said at a news conference following the Fed’s decision to raise its policy rate by another 75 basis points.
“For the longer term what we need is supply and demand to get better aligned so housing prices go up at a reasonable level, at a reasonable pace and people can afford houses again."
"We probably in the housing market have to go through a correction to get back to that place.”
The Fed’s rate hikes this year have had their biggest impact on the housing sector, slowing sales and bringing prices a bit lower.
Shelter inflation will remain high for some time, Powell said.
Reporting by Ann Saphir and Lindsay Dunsmuir; Editing by Leslie Adler and Andrea Ricci
https://www.reuters.com/article/usa-fed ... SL1N30S2EY
"Fed's Powell: U.S. housing market headed for 'correction'"
By Reuters Staff
SEPTEMBER 21, 2022
(Reuters) - Federal Reserve Chair Jerome Powell on Wednesday said the U.S. housing market will probably go through a “correction” after a period of “red hot” price increases that have put home ownership out of reach for many Americans.
“There was a big imbalance ... housing prices were going up at an unsustainably fast level,” Powell said at a news conference following the Fed’s decision to raise its policy rate by another 75 basis points.
“For the longer term what we need is supply and demand to get better aligned so housing prices go up at a reasonable level, at a reasonable pace and people can afford houses again."
"We probably in the housing market have to go through a correction to get back to that place.”
The Fed’s rate hikes this year have had their biggest impact on the housing sector, slowing sales and bringing prices a bit lower.
Shelter inflation will remain high for some time, Powell said.
Reporting by Ann Saphir and Lindsay Dunsmuir; Editing by Leslie Adler and Andrea Ricci
https://www.reuters.com/article/usa-fed ... SL1N30S2EY
Re: THE HOUSING MARKET
REUTERS
"U.S. rents surge, leaving behind generation of younger workers"
By Rose Horowitch
September 21, 2022
Sept 21 (Reuters) - The cost of renting a home in the United States is surging and young workers have felt the sharpest pain, many of them taking on additional jobs or roommates to afford housing costs.
Household rents in 2021 jumped 10% from pre-pandemic levels, according to Census Bureau estimates released last week.
The figures came as rising healthcare and rental costs pushed U.S. consumer prices up unexpectedly last month.
The data from the bureau’s annual American Community Survey put median U.S. rent at $1,037 in 2021, up from $941 in 2019.
Year-over-year increases in the median household rent over the past decade were typically 2% or 3% - one exception was the 5% rise from 2018 to 2019.
Among those affected most are recent college graduates and other new entrants to the workforce, who have little in savings and cannot afford to buy a house.
Take Maeve Kozlark, a New York University doctoral student.
The 23-year-old spent a year in an apartment in New York City's Queens borough with a door that wouldn’t lock.
The landlord's refusal to fix the latch prompted Kozlark to make a TikTok video about it.
A year and 230,000 views later, the lock was still broken when the landlord announced a $1,000 hike on top of an existing rent of $2,500, Kozlark said.
"So began our crazy search to find something that was affordable and not a shoebox, which is pretty impossible,” said Kozlark, feeling lucky to have found a new place to rent for $3,300 in Queens.
Similar accounts of abrupt price hikes and rental struggles abound across the country.
In Austin, Texas, 22-year-old Skyler Lee signed a one-year lease for a two-bedroom apartment for which she and her boyfriend together pay $1950 a month in rent.
Within a month of moving in, comparable apartments in the building were being rented out at $2,400 per month - the price Lee expects to pay to renew her lease next year.
In Chicago, 23-year-old Kelvin Angelo Cupay decided to forego renting altogether and move in with family in Chicago because he expects to have to fork out close to $1000 in monthly rent, which he cannot afford while searching for a job.
On the West Coast, Celine Pun, 21, initially added a housemate to her Santa Barbara apartment to make costs affordable.
But she ended up moving out when the $600 in monthly rent for her share of the three-bedroom apartment rose by $50 and some of her five housemates left.
"It was a very frustrating process,” Pun said.
'TRULY UNPRECEDENTED'
Adding to renters' woes, rents in the professionally-managed sector - usually larger properties operated by management companies - have risen even more dramatically.
Annual rent growth there hit 11.6% at the end of 2021 and start of 2022, about three times what it was in the five years prior to the pandemic, according to the Harvard Joint Center for Housing Studies.
At the same time, vacancy rates fell to their lowest since 1984 as post-pandemic demand surged.
"It’s a truly unprecedented market in a lot of ways,” said Whitney Airgood-Obrycki, a senior research associate at the Harvard housing center.
A key factor in all this has been the COVID-19 pandemic.
As coronavirus infections spread in 2020, wealthier people went to summer homes or remote areas to avoid infection, leading to vacancies and steep rent reductions in many cities.
Now, landlords are making up for those losses while also trying to recoup higher maintenance and insurance costs, said Alexandra Alvarado, marketing director at the American Apartment Owners Association, which represents smaller landlords.
With low supply in large cities and rural areas where more people have moved for remote work, landlords can ask prospective tenants to show higher incomes than previously required, she said.
Adding to the demand, the millennial generation of mostly those in their thirties continues to live in apartments and is unable to purchase homes, said Michael Keane, adjunct professor of urban planning at New York University.
"They’re sort of stonewalling the new rental population that was behind them,” he said.
Some minority groups are also likely to feel the pinch more.
Black renters are less likely to have parents who own homes – a key source of wealth in the United States — and can help them financially, said Ingrid Gould Ellen, professor of urban policy and planning at New York University.
A recent survey by real estate company Zillow found that renters of color are asked to pay higher security deposits and more application fees than their white counterparts.
All of this has made for a market where just securing any apartment can be a big deal in some areas.
In New York - long known for its competitive and pricey rental market - apartment hunters have reported encountering landlords seeking tenants with an annual salary at least 40 times a month’s rent, or with guarantors who make more than 80 times a month’s rent.
Recent college graduate Caleb Seamon, 22, started delivering for Uber Eats alongside his full-time job at a think-tank to afford housing.
Even so, Seamon says he only found a New York apartment because one of his roommate's parents acted as guarantors.
“It’s a remarkably hard and privileged thing to be able to get even just the cheapest apartment on the market right now here,” Seamon said.
Reporting by Rose Horowitch in New Haven, Conn., Editing by Donna Bryson and Deepa Babington
https://www.reuters.com/markets/us/us-r ... 022-09-21/
"U.S. rents surge, leaving behind generation of younger workers"
By Rose Horowitch
September 21, 2022
Sept 21 (Reuters) - The cost of renting a home in the United States is surging and young workers have felt the sharpest pain, many of them taking on additional jobs or roommates to afford housing costs.
Household rents in 2021 jumped 10% from pre-pandemic levels, according to Census Bureau estimates released last week.
The figures came as rising healthcare and rental costs pushed U.S. consumer prices up unexpectedly last month.
The data from the bureau’s annual American Community Survey put median U.S. rent at $1,037 in 2021, up from $941 in 2019.
Year-over-year increases in the median household rent over the past decade were typically 2% or 3% - one exception was the 5% rise from 2018 to 2019.
Among those affected most are recent college graduates and other new entrants to the workforce, who have little in savings and cannot afford to buy a house.
Take Maeve Kozlark, a New York University doctoral student.
The 23-year-old spent a year in an apartment in New York City's Queens borough with a door that wouldn’t lock.
The landlord's refusal to fix the latch prompted Kozlark to make a TikTok video about it.
A year and 230,000 views later, the lock was still broken when the landlord announced a $1,000 hike on top of an existing rent of $2,500, Kozlark said.
"So began our crazy search to find something that was affordable and not a shoebox, which is pretty impossible,” said Kozlark, feeling lucky to have found a new place to rent for $3,300 in Queens.
Similar accounts of abrupt price hikes and rental struggles abound across the country.
In Austin, Texas, 22-year-old Skyler Lee signed a one-year lease for a two-bedroom apartment for which she and her boyfriend together pay $1950 a month in rent.
Within a month of moving in, comparable apartments in the building were being rented out at $2,400 per month - the price Lee expects to pay to renew her lease next year.
In Chicago, 23-year-old Kelvin Angelo Cupay decided to forego renting altogether and move in with family in Chicago because he expects to have to fork out close to $1000 in monthly rent, which he cannot afford while searching for a job.
On the West Coast, Celine Pun, 21, initially added a housemate to her Santa Barbara apartment to make costs affordable.
But she ended up moving out when the $600 in monthly rent for her share of the three-bedroom apartment rose by $50 and some of her five housemates left.
"It was a very frustrating process,” Pun said.
'TRULY UNPRECEDENTED'
Adding to renters' woes, rents in the professionally-managed sector - usually larger properties operated by management companies - have risen even more dramatically.
Annual rent growth there hit 11.6% at the end of 2021 and start of 2022, about three times what it was in the five years prior to the pandemic, according to the Harvard Joint Center for Housing Studies.
At the same time, vacancy rates fell to their lowest since 1984 as post-pandemic demand surged.
"It’s a truly unprecedented market in a lot of ways,” said Whitney Airgood-Obrycki, a senior research associate at the Harvard housing center.
A key factor in all this has been the COVID-19 pandemic.
As coronavirus infections spread in 2020, wealthier people went to summer homes or remote areas to avoid infection, leading to vacancies and steep rent reductions in many cities.
Now, landlords are making up for those losses while also trying to recoup higher maintenance and insurance costs, said Alexandra Alvarado, marketing director at the American Apartment Owners Association, which represents smaller landlords.
With low supply in large cities and rural areas where more people have moved for remote work, landlords can ask prospective tenants to show higher incomes than previously required, she said.
Adding to the demand, the millennial generation of mostly those in their thirties continues to live in apartments and is unable to purchase homes, said Michael Keane, adjunct professor of urban planning at New York University.
"They’re sort of stonewalling the new rental population that was behind them,” he said.
Some minority groups are also likely to feel the pinch more.
Black renters are less likely to have parents who own homes – a key source of wealth in the United States — and can help them financially, said Ingrid Gould Ellen, professor of urban policy and planning at New York University.
A recent survey by real estate company Zillow found that renters of color are asked to pay higher security deposits and more application fees than their white counterparts.
All of this has made for a market where just securing any apartment can be a big deal in some areas.
In New York - long known for its competitive and pricey rental market - apartment hunters have reported encountering landlords seeking tenants with an annual salary at least 40 times a month’s rent, or with guarantors who make more than 80 times a month’s rent.
Recent college graduate Caleb Seamon, 22, started delivering for Uber Eats alongside his full-time job at a think-tank to afford housing.
Even so, Seamon says he only found a New York apartment because one of his roommate's parents acted as guarantors.
“It’s a remarkably hard and privileged thing to be able to get even just the cheapest apartment on the market right now here,” Seamon said.
Reporting by Rose Horowitch in New Haven, Conn., Editing by Donna Bryson and Deepa Babington
https://www.reuters.com/markets/us/us-r ... 022-09-21/
Re: THE HOUSING MARKET
REUTERS
"U.S. home sales drop for 7th straight month, house price growth cooling"
By Lucia Mutikani
September 21, 2022
Summary
* Existing home sales fall 0.4% in August
* Median house price increases 7.7% from year ago
* Housing supply at 1.28 million, unchanged from year ago
WASHINGTON, Sept 21 (Reuters) - U.S. existing home sales dropped for a seventh straight month in August as affordability deteriorated further amid surging mortgage rates and stubbornly high house prices, though the pace of decline moderated from prior months.
The report from the National Association of Realtors on Wednesday followed news this week that confidence among single-family homebuilders eroded for a ninth consecutive month in September, while permits for future homebuilding tumbled to the lowest level since June 2020 in August.
The Federal Reserve's aggressive monetary policy tightening, marked by oversized interest rate increases, has weakened the housing market considerably.
In contrast, other sectors of the economy, like the labor market, have shown incredible resilience despite the U.S. central bank's attempts to cool demand.
The Fed delivered a 75 basis points rate hike on Wednesday, its third straight increase of that magnitude and signaled more large increases to come this year.
"The decline in affordability is by design to some extent," said Daniel Vielhaber, an economist at Nationwide in Columbus, Ohio.
"Housing is the most sensitive to changes in the Fed's interest rate policy."
"The Fed's goal of slowing economic demand by raising interest rates starts with home sales."
Existing home sales slipped 0.4% to a seasonally adjusted annual rate of 4.80 million units last month.
Discounting the plunge during the spring of 2020 when the economy was reeling from the first wave of the COVID-19 pandemic, it was the lowest sales level since November 2015.
Sales rose in the Northeast and West, but were unchanged in the densely populated South.
They fell in the Midwest, which is generally considered a more affordable housing region.
Economists polled by Reuters had forecast sales decreasing to a rate of 4.70 million units.
The smaller-than-expected decline was likely the result of contracts signed in July, when mortgage rates retreated after sharp increases.
They slowed further in August, which could result in home sales eking out some gains in September.
But the outlook for the housing market remains dark.
Housing finance giant Fannie Mae on Wednesday lowered its forecast for total home sales this year to 5.71 million units from 5.78 million units previously.
It now expects home sales to come in at 4.98 million units in 2023, revised down from the previously estimated 5.18 million units.
Since March, the Fed has raised its policy rate from near zero to its current range of 3.0% to 3.25%.
Stocks on Wall Street slumped following the Fed's Wednesday rate hike.
The dollar rallied against a basket of currencies.
Yields on the interest-rate-sensitive two-year Treasury note rose above 4% for the first time since 2007.
HIGHER MORTGAGE RATES
"We expect the slowdown in housing to continue through 2023 as affordability constraints mount for potential homebuyers, and considering, too, that refinance activity has been significantly curtailed by the rise in mortgage rates," said Doug Duncan, chief economist at Fannie Mae.
The 30-year fixed mortgage rate averaged 6.02% last week, from 5.89% in the prior week, breaking above 6% for the first time since November 2008, according to data from mortgage finance agency Freddie Mac.
Though house price growth has slowed as demand weakened, tight supply is keeping prices elevated.
The median existing-house price increased 7.7% from a year earlier to $389,500 in August.
That was the smallest year-on-year rise since early in the pandemic.
The median house price hit a record high of $413,800 in June.
Rising mortgage rates and home prices since the start of the year have boosted monthly mortgage payments more than 50%.
"Home price growth is likely to continue to decelerate, but the limited supply of homes for sale will likely prevent too steep a decline," said Nancy Vanden Houten, a U.S. economist at Oxford Economics in New York.
There were 1.28 million previously owned homes on the market, unchanged from a year ago as the higher borrowing costs discourage homeowners who locked in lower rates years ago from selling their properties.
At August's sales pace, it would take 3.2 months to exhaust the current inventory of existing homes, up from 2.6 months a year ago.
The improvement is mostly because sales are weakening.
A five-to-seven-month supply is viewed as a healthy balance between supply and demand.
Properties typically remained on the market for 16 days, down from 17 days last August.
Before the pandemic 30 days on the market was the norm.
Eighty-one percent of homes sold were on the market for less than a month.
First-time buyers accounted for 29% of purchases, unchanged from July and a year ago.
All-cash sales made up 24% of transactions, up from 22% from a year ago.
Prior to 2020, cash sales accounted for only 20% of transactions.
The NAR attributed the higher cash sales share to people needing loans to buy a home dropping out of the market.
Reporting by Lucia Mutikani; Editing by Andrea Ricci and Leslie Adler
https://www.reuters.com/markets/us/us-e ... 022-09-21/
"U.S. home sales drop for 7th straight month, house price growth cooling"
By Lucia Mutikani
September 21, 2022
Summary
* Existing home sales fall 0.4% in August
* Median house price increases 7.7% from year ago
* Housing supply at 1.28 million, unchanged from year ago
WASHINGTON, Sept 21 (Reuters) - U.S. existing home sales dropped for a seventh straight month in August as affordability deteriorated further amid surging mortgage rates and stubbornly high house prices, though the pace of decline moderated from prior months.
The report from the National Association of Realtors on Wednesday followed news this week that confidence among single-family homebuilders eroded for a ninth consecutive month in September, while permits for future homebuilding tumbled to the lowest level since June 2020 in August.
The Federal Reserve's aggressive monetary policy tightening, marked by oversized interest rate increases, has weakened the housing market considerably.
In contrast, other sectors of the economy, like the labor market, have shown incredible resilience despite the U.S. central bank's attempts to cool demand.
The Fed delivered a 75 basis points rate hike on Wednesday, its third straight increase of that magnitude and signaled more large increases to come this year.
"The decline in affordability is by design to some extent," said Daniel Vielhaber, an economist at Nationwide in Columbus, Ohio.
"Housing is the most sensitive to changes in the Fed's interest rate policy."
"The Fed's goal of slowing economic demand by raising interest rates starts with home sales."
Existing home sales slipped 0.4% to a seasonally adjusted annual rate of 4.80 million units last month.
Discounting the plunge during the spring of 2020 when the economy was reeling from the first wave of the COVID-19 pandemic, it was the lowest sales level since November 2015.
Sales rose in the Northeast and West, but were unchanged in the densely populated South.
They fell in the Midwest, which is generally considered a more affordable housing region.
Economists polled by Reuters had forecast sales decreasing to a rate of 4.70 million units.
The smaller-than-expected decline was likely the result of contracts signed in July, when mortgage rates retreated after sharp increases.
They slowed further in August, which could result in home sales eking out some gains in September.
But the outlook for the housing market remains dark.
Housing finance giant Fannie Mae on Wednesday lowered its forecast for total home sales this year to 5.71 million units from 5.78 million units previously.
It now expects home sales to come in at 4.98 million units in 2023, revised down from the previously estimated 5.18 million units.
Since March, the Fed has raised its policy rate from near zero to its current range of 3.0% to 3.25%.
Stocks on Wall Street slumped following the Fed's Wednesday rate hike.
The dollar rallied against a basket of currencies.
Yields on the interest-rate-sensitive two-year Treasury note rose above 4% for the first time since 2007.
HIGHER MORTGAGE RATES
"We expect the slowdown in housing to continue through 2023 as affordability constraints mount for potential homebuyers, and considering, too, that refinance activity has been significantly curtailed by the rise in mortgage rates," said Doug Duncan, chief economist at Fannie Mae.
The 30-year fixed mortgage rate averaged 6.02% last week, from 5.89% in the prior week, breaking above 6% for the first time since November 2008, according to data from mortgage finance agency Freddie Mac.
Though house price growth has slowed as demand weakened, tight supply is keeping prices elevated.
The median existing-house price increased 7.7% from a year earlier to $389,500 in August.
That was the smallest year-on-year rise since early in the pandemic.
The median house price hit a record high of $413,800 in June.
Rising mortgage rates and home prices since the start of the year have boosted monthly mortgage payments more than 50%.
"Home price growth is likely to continue to decelerate, but the limited supply of homes for sale will likely prevent too steep a decline," said Nancy Vanden Houten, a U.S. economist at Oxford Economics in New York.
There were 1.28 million previously owned homes on the market, unchanged from a year ago as the higher borrowing costs discourage homeowners who locked in lower rates years ago from selling their properties.
At August's sales pace, it would take 3.2 months to exhaust the current inventory of existing homes, up from 2.6 months a year ago.
The improvement is mostly because sales are weakening.
A five-to-seven-month supply is viewed as a healthy balance between supply and demand.
Properties typically remained on the market for 16 days, down from 17 days last August.
Before the pandemic 30 days on the market was the norm.
Eighty-one percent of homes sold were on the market for less than a month.
First-time buyers accounted for 29% of purchases, unchanged from July and a year ago.
All-cash sales made up 24% of transactions, up from 22% from a year ago.
Prior to 2020, cash sales accounted for only 20% of transactions.
The NAR attributed the higher cash sales share to people needing loans to buy a home dropping out of the market.
Reporting by Lucia Mutikani; Editing by Andrea Ricci and Leslie Adler
https://www.reuters.com/markets/us/us-e ... 022-09-21/
Re: THE HOUSING MARKET
REUTERS
"U.S. mortgage rates rise to 6.29%, highest in 14 years"
By Reuters Staff
SEPTEMBER 22, 2022
(Reuters) - U.S. 30-year fixed-rate mortgages rose to 6.29% on Thursday, the highest level since 2008, according to Freddie Mac’s mortgage market survey.
Last week, rates averaged 6.02%.
A year ago, home buyers enjoyed rates of 2.88%.
The Federal Reserve’s aggressive monetary policy tightening, including a 75 basis point hike announced on Wednesday, has weakened the housing market considerably.
The Freddie Mac survey found that 15-year fixed rate mortgages averaged at 5.44% up from 5.21% the week before and 2.15% a year-ago.
“The housing market continues to face headwinds as mortgage rates increase again this week, following the 10-year Treasury yield’s jump to its highest level since 2011,” said Sam Khater, Freddie Mac’s chief economist in a statement.
“Impacted by higher rates, house prices are softening, and home sales have decreased."
"However, the number of homes for sale remains well below normal levels.”
The 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 4.97% in the latest survey up from 4.93% last week and 2.43% last week.
Reporting by Sinéad Carew; Editing by Lisa Shumaker
https://www.reuters.com/article/usa-mor ... SW1N30T005
"U.S. mortgage rates rise to 6.29%, highest in 14 years"
By Reuters Staff
SEPTEMBER 22, 2022
(Reuters) - U.S. 30-year fixed-rate mortgages rose to 6.29% on Thursday, the highest level since 2008, according to Freddie Mac’s mortgage market survey.
Last week, rates averaged 6.02%.
A year ago, home buyers enjoyed rates of 2.88%.
The Federal Reserve’s aggressive monetary policy tightening, including a 75 basis point hike announced on Wednesday, has weakened the housing market considerably.
The Freddie Mac survey found that 15-year fixed rate mortgages averaged at 5.44% up from 5.21% the week before and 2.15% a year-ago.
“The housing market continues to face headwinds as mortgage rates increase again this week, following the 10-year Treasury yield’s jump to its highest level since 2011,” said Sam Khater, Freddie Mac’s chief economist in a statement.
“Impacted by higher rates, house prices are softening, and home sales have decreased."
"However, the number of homes for sale remains well below normal levels.”
The 5-year Treasury indexed hybrid adjustable-rate mortgage averaged 4.97% in the latest survey up from 4.93% last week and 2.43% last week.
Reporting by Sinéad Carew; Editing by Lisa Shumaker
https://www.reuters.com/article/usa-mor ... SW1N30T005
Re: THE HOUSING MARKET
YAHOO Finance
"Housing expert: Home sale cancellations 'have spiked tremendously'"
Dani Romero
24 SEPTEMBER 2022
Home sales have been falling through for many sellers since the beginning of the summer, according to one analyst, as many homebuyers are retreating from the housing market.
"June is when many builders will tell you they have seen an inflection in the housing market," Deepa Raghavan, senior equity analyst at Wells Fargo Securities, told Yahoo Finance Live.
"Their metrics started going down from June."
"What we will tell you is July and August, those metrics actually took a turn for the worse."
"In talking to people on the field, it feels like cancellation rates have spiked tremendously."
With the Federal Reserve hiking interest rates up another 75 basis points and fears of a recession on the horizon, more and more homebuyers have become hesitant about purchasing a new home.
New listings of homes for sale slid 15% in the four weeks ending Aug. 21, marking the biggest decline since the start of the pandemic, Redfin reported.
Consequently, that's pushed supply for homes down, as for-sale homes dropped to 0.6% from the previous four-week period.
Sellers are trying boost sales by luring hesitant homebuyers by mortgage rate buydowns, free amenities, and price reductions.
"The builders have just now started to get on the price competition bandwagon," Raghavan said.
"Incentives or discounting have increased tremendously..."
"In some communities, builders are incentivizing or discounting to the tune of 15% of list prices."
"Now in some communities, although it's still at the margins, it could be as high as 25%."
Almost 1 in 4 home builders reported reducing their price this month, up from 19% in August, according to a monthly survey and index from the National Association of Home Builders (NAHB).
Home builder confidence fell three points to its lowest level since May 2014.
Still, the median home sales price for an existing house ticked up 7.7% year over year in August to $389,500, though down from the record high of $413,800 in June.
Meanwhile, all four NAHB regions posted a drop in builder confidence.
Regionally, the decline was led by the West, which saw a 10-point drop, followed by the South, the index slipped 7 points.
The Northeast and Midwest saw a 5-point drop.
Raghavan isn't optimistic that things will improve for homebuyers any time soon, especially due to expectations of more interest rate hikes from the Federal Reserve.
"The buyers definitely have been hurt," Raghavan said.
"The mortgage rates are actually trending higher."
"There's a lot more pressure coming in from the Fed — granted, some of it is priced in."
"But I don't know how we get to see any respite between now and Super Bowl."
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
https://www.msn.com/en-us/money/realest ... d8cecbae10
"Housing expert: Home sale cancellations 'have spiked tremendously'"
Dani Romero
24 SEPTEMBER 2022
Home sales have been falling through for many sellers since the beginning of the summer, according to one analyst, as many homebuyers are retreating from the housing market.
"June is when many builders will tell you they have seen an inflection in the housing market," Deepa Raghavan, senior equity analyst at Wells Fargo Securities, told Yahoo Finance Live.
"Their metrics started going down from June."
"What we will tell you is July and August, those metrics actually took a turn for the worse."
"In talking to people on the field, it feels like cancellation rates have spiked tremendously."
With the Federal Reserve hiking interest rates up another 75 basis points and fears of a recession on the horizon, more and more homebuyers have become hesitant about purchasing a new home.
New listings of homes for sale slid 15% in the four weeks ending Aug. 21, marking the biggest decline since the start of the pandemic, Redfin reported.
Consequently, that's pushed supply for homes down, as for-sale homes dropped to 0.6% from the previous four-week period.
Sellers are trying boost sales by luring hesitant homebuyers by mortgage rate buydowns, free amenities, and price reductions.
"The builders have just now started to get on the price competition bandwagon," Raghavan said.
"Incentives or discounting have increased tremendously..."
"In some communities, builders are incentivizing or discounting to the tune of 15% of list prices."
"Now in some communities, although it's still at the margins, it could be as high as 25%."
Almost 1 in 4 home builders reported reducing their price this month, up from 19% in August, according to a monthly survey and index from the National Association of Home Builders (NAHB).
Home builder confidence fell three points to its lowest level since May 2014.
Still, the median home sales price for an existing house ticked up 7.7% year over year in August to $389,500, though down from the record high of $413,800 in June.
Meanwhile, all four NAHB regions posted a drop in builder confidence.
Regionally, the decline was led by the West, which saw a 10-point drop, followed by the South, the index slipped 7 points.
The Northeast and Midwest saw a 5-point drop.
Raghavan isn't optimistic that things will improve for homebuyers any time soon, especially due to expectations of more interest rate hikes from the Federal Reserve.
"The buyers definitely have been hurt," Raghavan said.
"The mortgage rates are actually trending higher."
"There's a lot more pressure coming in from the Fed — granted, some of it is priced in."
"But I don't know how we get to see any respite between now and Super Bowl."
Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter @daniromerotv
https://www.msn.com/en-us/money/realest ... d8cecbae10
Re: THE HOUSING MARKET
REUTERS
"Fed's Harker says housing shortage a key inflation driver"
By Michael S. Derby
September 27, 2022
NEW YORK, Sept 27 (Reuters) - Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday a housing shortage is a key driver of the nation's historic surge in inflation.
"Since the Great Recession, the United States has not built enough housing to keep price growth relatively modest," Harker said in an essay published on the bank's website.
This shortage is "a major driver of the far-too-high inflation plaguing our country," he added.
"Inflation is far too high across most goods and services in our economy," Harker said, noting that the Fed "is working to stabilize inflation and put the economy on a firmer footing for the long haul."
Harker, a nonvoting member of the rate-setting Federal Open Market Committee, did not comment on the monetary policy outlook in his essay.
The central bank has been pressing forward with aggressive rate hikes aimed at taming the highest inflation in four decades.
Last week, the FOMC hiked its overnight target rate range by 0.75 percentage point, to between 3% and 3.25%, as it signaled more increases ahead.
Fed officials and many private sector economists tie the inflation surge to pandemic-related disruptions and periods of aggressive government stimulus.
Housing has been a key factor in rising prices.
Harker's essay noted that housing-driven inflation is "particularly alarming" in part because along with food price increases, housing factors affect almost all Americans.
Moreover, "high housing inflation is a macroeconomic problem; money spent on housing is money not spent on education, durable goods, or meals out," he added.
"We must do everything we can to get shelter inflation under control."
Reporting by Michael S. Derby; Editing by Chris Reese and Richard Chang
https://www.reuters.com/markets/us/feds ... 022-09-27/
"Fed's Harker says housing shortage a key inflation driver"
By Michael S. Derby
September 27, 2022
NEW YORK, Sept 27 (Reuters) - Federal Reserve Bank of Philadelphia President Patrick Harker said on Tuesday a housing shortage is a key driver of the nation's historic surge in inflation.
"Since the Great Recession, the United States has not built enough housing to keep price growth relatively modest," Harker said in an essay published on the bank's website.
This shortage is "a major driver of the far-too-high inflation plaguing our country," he added.
"Inflation is far too high across most goods and services in our economy," Harker said, noting that the Fed "is working to stabilize inflation and put the economy on a firmer footing for the long haul."
Harker, a nonvoting member of the rate-setting Federal Open Market Committee, did not comment on the monetary policy outlook in his essay.
The central bank has been pressing forward with aggressive rate hikes aimed at taming the highest inflation in four decades.
Last week, the FOMC hiked its overnight target rate range by 0.75 percentage point, to between 3% and 3.25%, as it signaled more increases ahead.
Fed officials and many private sector economists tie the inflation surge to pandemic-related disruptions and periods of aggressive government stimulus.
Housing has been a key factor in rising prices.
Harker's essay noted that housing-driven inflation is "particularly alarming" in part because along with food price increases, housing factors affect almost all Americans.
Moreover, "high housing inflation is a macroeconomic problem; money spent on housing is money not spent on education, durable goods, or meals out," he added.
"We must do everything we can to get shelter inflation under control."
Reporting by Michael S. Derby; Editing by Chris Reese and Richard Chang
https://www.reuters.com/markets/us/feds ... 022-09-27/
Re: THE HOUSING MARKET
MARKETWATCH
"New York City’s housing market now resembles 2008 in one critical way — and it’s especially bad news for renters"
Emma Ockerman
8 OCTOBER 2022
New Yorkers’ rents are rising.
The same can’t be said for their wages.
New York City’s rental costs soared by 13.4% between August 2021 and August 2022 when adjusted for inflation, according to a report released Thursday by the real-estate platform StreetEasy.
Real wages in the city, meanwhile, slid 9.1% in the same time frame, StreetEasy said.
That means rent growth ultimately surpassed wage growth by 23% in the Big Apple, notching the widest gap between the two metrics since the 2008 financial crisis, when rent prices dropped sharply, Kenny Lee, an economist at StreetEasy, told MarketWatch.
Today, “a lot of the gap between wage growth and rent growth is driven by soaring inflation,” Lee said.
The uneven growth might be particularly challenging for frontline workers and people earning lower wages.
The uneven growth might be particularly challenging for frontline workers and people earning lower wages.
For the typical New Yorkers employed across nine occupational groups examined by StreetEasy — including workers in healthcare support, food preparation and serving, transportation services, and more — just 10% of the city’s available rental inventory could have been considered affordable on their incomes this summer, StreetEasy said.
(That’s assuming the workers were the sole source of income in their household and earned the median wage, the report noted.)
The other 90% of rental units would have cost the same workers, who make up about 48% of the city’s overall workforce, more than half of their income on housing, StreetEasy said.
That reality was already faced by about a third of renting New Yorkers in 2021.
While the city’s median asking rent was up 27% from a year ago in September, it’s no longer growing as quickly as it was this summer.
And no one fared worse than healthcare-support workers, a category that includes home-health aides and nursing aides.
Typical annual wages in that field are about $38,730 based on state data, which means that barely 2% of the city’s rental inventory this summer was available to those who wanted to spend less than half of their income on rent.
Still, the report, like many other rental analyses of late, notes that better days may be ahead.
While the city’s median asking rent was up 27% from a year ago in September, it’s no longer growing as quickly as it was this summer.
In fact, the median asking rent came down by $75 between August and September, settling at a still eye-watering $3,500.
StreetEasy also said that about 8.6% of landlords in the city were offering prospective tenants a sweetener of at least one month of free rent in September, suggesting they’re having a more difficult time filing vacancies — and perhaps aren’t as confident as they were earlier this year.
On a national level, the property-management software company RealPage also said in a report Tuesday that there’s been a major halt in leasing traffic: apartment demand in this year’s third quarter was negative — making it the first third quarter with negative demand in 30 years.
To be sure, though, apartment vacancies remain low at 4.4%.
So, even if the market appears to be moderating, that might not be enough to help struggling renters in the near-term.
“We just reached the peak of rent growth based on our data,” Lee said.
“It’s going to be a long winding road from the peak.”
https://www.msn.com/en-us/money/realest ... 70c8b42469
"New York City’s housing market now resembles 2008 in one critical way — and it’s especially bad news for renters"
Emma Ockerman
8 OCTOBER 2022
New Yorkers’ rents are rising.
The same can’t be said for their wages.
New York City’s rental costs soared by 13.4% between August 2021 and August 2022 when adjusted for inflation, according to a report released Thursday by the real-estate platform StreetEasy.
Real wages in the city, meanwhile, slid 9.1% in the same time frame, StreetEasy said.
That means rent growth ultimately surpassed wage growth by 23% in the Big Apple, notching the widest gap between the two metrics since the 2008 financial crisis, when rent prices dropped sharply, Kenny Lee, an economist at StreetEasy, told MarketWatch.
Today, “a lot of the gap between wage growth and rent growth is driven by soaring inflation,” Lee said.
The uneven growth might be particularly challenging for frontline workers and people earning lower wages.
The uneven growth might be particularly challenging for frontline workers and people earning lower wages.
For the typical New Yorkers employed across nine occupational groups examined by StreetEasy — including workers in healthcare support, food preparation and serving, transportation services, and more — just 10% of the city’s available rental inventory could have been considered affordable on their incomes this summer, StreetEasy said.
(That’s assuming the workers were the sole source of income in their household and earned the median wage, the report noted.)
The other 90% of rental units would have cost the same workers, who make up about 48% of the city’s overall workforce, more than half of their income on housing, StreetEasy said.
That reality was already faced by about a third of renting New Yorkers in 2021.
While the city’s median asking rent was up 27% from a year ago in September, it’s no longer growing as quickly as it was this summer.
And no one fared worse than healthcare-support workers, a category that includes home-health aides and nursing aides.
Typical annual wages in that field are about $38,730 based on state data, which means that barely 2% of the city’s rental inventory this summer was available to those who wanted to spend less than half of their income on rent.
Still, the report, like many other rental analyses of late, notes that better days may be ahead.
While the city’s median asking rent was up 27% from a year ago in September, it’s no longer growing as quickly as it was this summer.
In fact, the median asking rent came down by $75 between August and September, settling at a still eye-watering $3,500.
StreetEasy also said that about 8.6% of landlords in the city were offering prospective tenants a sweetener of at least one month of free rent in September, suggesting they’re having a more difficult time filing vacancies — and perhaps aren’t as confident as they were earlier this year.
On a national level, the property-management software company RealPage also said in a report Tuesday that there’s been a major halt in leasing traffic: apartment demand in this year’s third quarter was negative — making it the first third quarter with negative demand in 30 years.
To be sure, though, apartment vacancies remain low at 4.4%.
So, even if the market appears to be moderating, that might not be enough to help struggling renters in the near-term.
“We just reached the peak of rent growth based on our data,” Lee said.
“It’s going to be a long winding road from the peak.”
https://www.msn.com/en-us/money/realest ... 70c8b42469
Re: THE HOUSING MARKET
REUTERS
"U.S. mortgage interest rates rise to highest level since 2006"
Reuters
October 12, 2022
Oct 12 (Reuters) - The average interest rate on the most popular U.S. home loan rose to its highest level since 2006 as the housing sector continued to bear the brunt of tightening financial conditions, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
Mortgage rates have more than doubled since the beginning of the year as the Federal Reserve pursues an aggressive path of interest rate hikes to bring down stubbornly high inflation.
Those actions, designed to cool the economy sufficiently to curb price pressures, have weighed heavily on the interest-rate-sensitive housing sector as expectations for Fed tightening have led to a surge in Treasury yields.
The yield on the 10-year note acts as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose by 6 basis points to 6.81% for the week ended Oct. 7 while the MBA's Market Composite Index, a measure of mortgage loan application volume, fell 2.0% from a week earlier and is down roughly 69% from one year ago.
Its Purchase Index, a measure of all mortgage loan applications for purchase of a single family home, fell 2.1% from the prior week and is 39% lower than a year ago, while MBA's refinance Index declined 1.8% last week and is down 86% from one year ago.
Homebuilding and sales have weakened significantly in recent months, with home resales posting seven straight months of declines.
However, home prices remain high even as house price growth slows, eroding affordability for buyers who are still competing due to a shortage of properties for sale.
Reporting by Lindsay Dunsmuir; Editing by Bernadette Baum
https://www.reuters.com/markets/us/us-m ... 022-10-12/
"U.S. mortgage interest rates rise to highest level since 2006"
Reuters
October 12, 2022
Oct 12 (Reuters) - The average interest rate on the most popular U.S. home loan rose to its highest level since 2006 as the housing sector continued to bear the brunt of tightening financial conditions, data from the Mortgage Bankers Association (MBA) showed on Wednesday.
Mortgage rates have more than doubled since the beginning of the year as the Federal Reserve pursues an aggressive path of interest rate hikes to bring down stubbornly high inflation.
Those actions, designed to cool the economy sufficiently to curb price pressures, have weighed heavily on the interest-rate-sensitive housing sector as expectations for Fed tightening have led to a surge in Treasury yields.
The yield on the 10-year note acts as a benchmark for mortgage rates.
The average contract rate on a 30-year fixed-rate mortgage rose by 6 basis points to 6.81% for the week ended Oct. 7 while the MBA's Market Composite Index, a measure of mortgage loan application volume, fell 2.0% from a week earlier and is down roughly 69% from one year ago.
Its Purchase Index, a measure of all mortgage loan applications for purchase of a single family home, fell 2.1% from the prior week and is 39% lower than a year ago, while MBA's refinance Index declined 1.8% last week and is down 86% from one year ago.
Homebuilding and sales have weakened significantly in recent months, with home resales posting seven straight months of declines.
However, home prices remain high even as house price growth slows, eroding affordability for buyers who are still competing due to a shortage of properties for sale.
Reporting by Lindsay Dunsmuir; Editing by Bernadette Baum
https://www.reuters.com/markets/us/us-m ... 022-10-12/
Re: THE HOUSING MARKET
CNBC
"Homebuilder sentiment drops to half of what it was six months ago"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED TUE, OCT 18 2022
KEY POINTS
* Homebuilder sentiment in the single-family home market fell 8 points to 38 in October from the previous month.
* Builders cite rapidly rising interest rates for the drop in confidence.
* The average rate on the 30-year fixed was more than 7% this week, up from 3% at the start of this year.
Homebuilder sentiment in the single-family home market has fallen to half what it was just six months ago as mortgage rates climb, according to a new report.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which is designed to gauge market conditions, fell 8 points to 38 in October from the previous month.
That’s the lowest level since 2012, with the exception of a brief drop at the start of the coronavirus pandemic.
A rating below 50 is considered negative.
Builders cite rapidly rising interest rates for the decline in confidence.
The average rate on the 30-year fixed was 7.12% on Monday, according to Mortgage News Daily.
That’s up from 3% at the start of this year.
“High mortgage rates ... have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” said NAHB Chairman Jerry Konter, a homebuilder and developer from Savannah, Georgia.
“This situation is unhealthy and unsustainable.”
Of the index’s three components, current sales conditions slid 9 points to 45, and sales expectations in the next six months dropped 11 points to 35.
Buyer traffic fell 6 points to 25.
“This will be the first year since 2011 to see a decline for single-family starts,” said Robert Dietz, chief economist for the NAHB.
Given expectations that interest rates will continue to be elevated, Dietz said 2023 is forecast to see additional single-family building declines.
On a three-month moving average, the sentiment score in the Northeast fell 3 points to 48.
In the Midwest it dropped 3 points to 41.
In the South it fell 7 points to 49 and in the West declined 7 points to 34.
https://www.cnbc.com/2022/10/18/homebui ... s-ago.html
"Homebuilder sentiment drops to half of what it was six months ago"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED TUE, OCT 18 2022
KEY POINTS
* Homebuilder sentiment in the single-family home market fell 8 points to 38 in October from the previous month.
* Builders cite rapidly rising interest rates for the drop in confidence.
* The average rate on the 30-year fixed was more than 7% this week, up from 3% at the start of this year.
Homebuilder sentiment in the single-family home market has fallen to half what it was just six months ago as mortgage rates climb, according to a new report.
The National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI), which is designed to gauge market conditions, fell 8 points to 38 in October from the previous month.
That’s the lowest level since 2012, with the exception of a brief drop at the start of the coronavirus pandemic.
A rating below 50 is considered negative.
Builders cite rapidly rising interest rates for the decline in confidence.
The average rate on the 30-year fixed was 7.12% on Monday, according to Mortgage News Daily.
That’s up from 3% at the start of this year.
“High mortgage rates ... have significantly weakened demand, particularly for first-time and first-generation prospective home buyers,” said NAHB Chairman Jerry Konter, a homebuilder and developer from Savannah, Georgia.
“This situation is unhealthy and unsustainable.”
Of the index’s three components, current sales conditions slid 9 points to 45, and sales expectations in the next six months dropped 11 points to 35.
Buyer traffic fell 6 points to 25.
“This will be the first year since 2011 to see a decline for single-family starts,” said Robert Dietz, chief economist for the NAHB.
Given expectations that interest rates will continue to be elevated, Dietz said 2023 is forecast to see additional single-family building declines.
On a three-month moving average, the sentiment score in the Northeast fell 3 points to 48.
In the Midwest it dropped 3 points to 41.
In the South it fell 7 points to 49 and in the West declined 7 points to 34.
https://www.cnbc.com/2022/10/18/homebui ... s-ago.html