MARKETWATCH
"Housing starts rise nearly 2% in September, driven by a building boom in the Northeast"
By Jacob Passy
Published: Oct. 20, 2020 at 8:41 a.m. ET
U.S. home builders started construction on homes at a seasonally-adjusted annual rate of 1.42 million in September, representing a 1.9% increase from the previous month's downwardly-revised figure, the U.S. Census Bureau reported Tuesday.
The modest increase in housing starts was fully driven by a 8.5% uptick in single-family starts, as multifamily construction activity dipped once again.
Home construction activity soared in the Northeast in particular.
Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.55 million, up more than 5% from August.
Economists polled by MarketWatch had expected housing starts to occur at a pace of 1.45 million and building permits to come in at a pace of 1.52 million.
https://www.marketwatch.com/story/housi ... 2020-10-20
THE HOUSING MARKET
Re: THE HOUSING MARKET
MARKETWATCH
"Existing-home sales soared in September — 7 in 10 homes sold in less than a month"
By Jacob Passy
Published: Oct. 22, 2020 at 11:43 a.m. ET
The numbers:
Existing-home sales increased for the fourth consecutive month in September, as the U.S. housing market benefitted from low interest rates.
Total existing-home sales rose 9.4% from August to a seasonally-adjusted, annual rate of 6.54 million, the National Association of Realtors reported Thursday.
Compared with a year ago, home sales were up nearly 21%.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” Lawrence Yun, the trade group’s chief economist, said in the report.
“I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”
Economists polled by MarketWatch had projected existing-home sales to rise to a median rate of 6.36 million.
What happened:
The fast pace of home sales has quickly dwindled the remaining supply of homes on the market, however.
More than seven in 10 homes on the market in September sold in less than a month.
As a result, by month’s end the total inventory of homes for sale dropped to a 2.7 months’ supply, the lowest on record.
A 6-month supply of homes is considered to be indicative of a balanced market.
The dwindling inventory of homes for sale, when combined with increased demand from buyers, drove prices higher.
The median existing-home price was $311,800, roughly 15% higher than in September 2019.
That’s the largest increase in home prices since late 2005.
Nevertheless, home sales grew in every region across the country, led by a 16.2% jump in the Northeast, the National Association of Realtors reported.
The big picture:
A combination of factors has driven home sales to their highest pace in many years.
“Existing home sales continued to register higher than one year ago as low mortgage rates helped offset the sting of sharply higher prices,” said Danielle Hale, chief economist at Realtor.com.
“Greater buyer and, perhaps more importantly, seller confidence also helped boost home sales activity this month.”
But there’s still the chance that the wheels could come off for the housing market in the months to come.
Unless sellers choose to enter the market in droves, the limited supply of homes for sale will naturally put a ceiling on how high sales volumes can go.
And as the pandemic continues, the risk of a prolonged economic downturn could cause some buyers to rethink making a big purchase right now given rising home prices, especially if they are worried about their job security.
What they’re saying:
“Higher earners have been more likely to retain their incomes, allowing the housing market to continue booming despite extremely high unemployment levels."
"Without a broader recovery, there remains risk to the housing market,” said Ruben Gonzalez, chief economist at Keller Williams.
“Mortgage rates are rock-bottom, and most homebuyers are much older than the typical customer-facing employee laid off during the Covid epidemic, but lending standards have tightened."
"We doubt this will be enough to push activity down materially anytime soon, but we don’t expect further big gains in home sales,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 were both down in Thursday morning trading.
https://www.marketwatch.com/story/exist ... 2020-10-22
"Existing-home sales soared in September — 7 in 10 homes sold in less than a month"
By Jacob Passy
Published: Oct. 22, 2020 at 11:43 a.m. ET
The numbers:
Existing-home sales increased for the fourth consecutive month in September, as the U.S. housing market benefitted from low interest rates.
Total existing-home sales rose 9.4% from August to a seasonally-adjusted, annual rate of 6.54 million, the National Association of Realtors reported Thursday.
Compared with a year ago, home sales were up nearly 21%.
“Home sales traditionally taper off toward the end of the year, but in September they surged beyond what we normally see during this season,” Lawrence Yun, the trade group’s chief economist, said in the report.
“I would attribute this jump to record-low interest rates and an abundance of buyers in the marketplace, including buyers of vacation homes given the greater flexibility to work from home.”
Economists polled by MarketWatch had projected existing-home sales to rise to a median rate of 6.36 million.
What happened:
The fast pace of home sales has quickly dwindled the remaining supply of homes on the market, however.
More than seven in 10 homes on the market in September sold in less than a month.
As a result, by month’s end the total inventory of homes for sale dropped to a 2.7 months’ supply, the lowest on record.
A 6-month supply of homes is considered to be indicative of a balanced market.
The dwindling inventory of homes for sale, when combined with increased demand from buyers, drove prices higher.
The median existing-home price was $311,800, roughly 15% higher than in September 2019.
That’s the largest increase in home prices since late 2005.
Nevertheless, home sales grew in every region across the country, led by a 16.2% jump in the Northeast, the National Association of Realtors reported.
The big picture:
A combination of factors has driven home sales to their highest pace in many years.
“Existing home sales continued to register higher than one year ago as low mortgage rates helped offset the sting of sharply higher prices,” said Danielle Hale, chief economist at Realtor.com.
“Greater buyer and, perhaps more importantly, seller confidence also helped boost home sales activity this month.”
But there’s still the chance that the wheels could come off for the housing market in the months to come.
Unless sellers choose to enter the market in droves, the limited supply of homes for sale will naturally put a ceiling on how high sales volumes can go.
And as the pandemic continues, the risk of a prolonged economic downturn could cause some buyers to rethink making a big purchase right now given rising home prices, especially if they are worried about their job security.
What they’re saying:
“Higher earners have been more likely to retain their incomes, allowing the housing market to continue booming despite extremely high unemployment levels."
"Without a broader recovery, there remains risk to the housing market,” said Ruben Gonzalez, chief economist at Keller Williams.
“Mortgage rates are rock-bottom, and most homebuyers are much older than the typical customer-facing employee laid off during the Covid epidemic, but lending standards have tightened."
"We doubt this will be enough to push activity down materially anytime soon, but we don’t expect further big gains in home sales,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Market reaction:
The Dow Jones Industrial Average and the S&P 500 were both down in Thursday morning trading.
https://www.marketwatch.com/story/exist ... 2020-10-22
Re: THE HOUSING MARKET
CNBC
"U.S. housing starts fell more than expected in January amid soaring lumber prices"
Reuters
Published Thu, Feb 18 2021
Key Points
* U.S. homebuilding fell more than expected in January amid soaring lumber prices, though a surge in permits for future construction suggested the housing market remains supported by lean inventories and historically low mortgage rates.
* Housing starts decreased 6.0% to a seasonally adjusted annual rate of 1.580 million units last month, the Commerce Department said on Thursday. Economists polled by Reuters had forecast starts would drop to a rate of 1.658 million units in January. Homebuilding fell 2.3% on a year-on-year basis.
* Permits for future homebuilding shot up 10.4% to a rate of 1.881 million units in January. Permits typically lead starts by one to two months.
U.S. homebuilding fell more than expected in January amid soaring lumber prices, though a surge in permits for future construction suggested the housing market remains supported by lean inventories and historically low mortgage rates.
Housing starts decreased 6.0% to a seasonally adjusted annual rate of 1.580 million units last month, the Commerce Department said on Thursday.
Economists polled by Reuters had forecast starts would drop to a rate of 1.658 million units in January.
Homebuilding fell 2.3% on a year-on-year basis.
The housing market has outperformed other sectors of the economy during the Covid-19 pandemic, supported by lower mortgage rates and demand for spacious accommodations for home offices and schooling.
But expensive inputs and lack of land pose a threat to continued robust housing market gains.
A survey on Wednesday showed confidence among single-family homebuilders edged up in February.
But builders complained that record-high lumber prices were “adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects.”
Softwood lumber prices jumped a record 73% on a year-on-year basis in January, according to data from the Labor Department.
Still, the housing market remains supported by historically low mortgage rates and lean inventories of previously owned homes.
Permits for future homebuilding shot up 10.4% to a rate of 1.881 million units in January.
Permits typically lead starts by one to two months.
Single-family homebuilding, the largest share of the housing market, tumbled 12.2% to a seasonally adjusted annual rate of 1.162 million units.
Single-family starts had increased for eight straight months.
Single-family building permits rose 3.8% to a rate of 1.269 million units in January.
Starts for the volatile multi-family segment surged 17.1% to a pace of 418,000 units.
Building permits for multi-family housing projects soared 27.2% to a pace of 612,000 units.
Data also provided by Reuters
https://www.cnbc.com/2021/02/18/us-hous ... 1613658505
"U.S. housing starts fell more than expected in January amid soaring lumber prices"
Reuters
Published Thu, Feb 18 2021
Key Points
* U.S. homebuilding fell more than expected in January amid soaring lumber prices, though a surge in permits for future construction suggested the housing market remains supported by lean inventories and historically low mortgage rates.
* Housing starts decreased 6.0% to a seasonally adjusted annual rate of 1.580 million units last month, the Commerce Department said on Thursday. Economists polled by Reuters had forecast starts would drop to a rate of 1.658 million units in January. Homebuilding fell 2.3% on a year-on-year basis.
* Permits for future homebuilding shot up 10.4% to a rate of 1.881 million units in January. Permits typically lead starts by one to two months.
U.S. homebuilding fell more than expected in January amid soaring lumber prices, though a surge in permits for future construction suggested the housing market remains supported by lean inventories and historically low mortgage rates.
Housing starts decreased 6.0% to a seasonally adjusted annual rate of 1.580 million units last month, the Commerce Department said on Thursday.
Economists polled by Reuters had forecast starts would drop to a rate of 1.658 million units in January.
Homebuilding fell 2.3% on a year-on-year basis.
The housing market has outperformed other sectors of the economy during the Covid-19 pandemic, supported by lower mortgage rates and demand for spacious accommodations for home offices and schooling.
But expensive inputs and lack of land pose a threat to continued robust housing market gains.
A survey on Wednesday showed confidence among single-family homebuilders edged up in February.
But builders complained that record-high lumber prices were “adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects.”
Softwood lumber prices jumped a record 73% on a year-on-year basis in January, according to data from the Labor Department.
Still, the housing market remains supported by historically low mortgage rates and lean inventories of previously owned homes.
Permits for future homebuilding shot up 10.4% to a rate of 1.881 million units in January.
Permits typically lead starts by one to two months.
Single-family homebuilding, the largest share of the housing market, tumbled 12.2% to a seasonally adjusted annual rate of 1.162 million units.
Single-family starts had increased for eight straight months.
Single-family building permits rose 3.8% to a rate of 1.269 million units in January.
Starts for the volatile multi-family segment surged 17.1% to a pace of 418,000 units.
Building permits for multi-family housing projects soared 27.2% to a pace of 612,000 units.
Data also provided by Reuters
https://www.cnbc.com/2021/02/18/us-hous ... 1613658505
Re: THE HOUSING MARKET
CNBC
"December home prices rose 10.4%, the biggest gain in 7 years, Case-Shiller says"
Diana Olick @in/dianaolick @DianaOlickCNBC @DianaOlick
Published Tue, Feb 23 2021
Key Points
* The 10-city composite annual increase was 9.8%, up from 8.9% in November.
* The 20-city composite posted a 10.1% gain, up from 9.2% in the previous month.
* Phoenix, Seattle, and San Diego continued to show the strongest price gains among the 19 cities surveyed.
December is usually the slowest month for the housing market, but price gains didn’t slow down one bit in 2020.
In fact, they rose at the fastest pace in seven years.
Home prices nationally increased 10.4% compared with December 2019, according to the S&P CoreLogic Case-Shiller Home Price Indices.
That is the strongest annual growth rate in over six years, and a significantly stronger gain than in November, when prices were up 9.5%.
It also ranks as one of the largest annual gains in the more than 30-year history of the index.
The 10-city composite annual increase was 9.8%, up from 8.9% in November.
The 20-city composite posted a 10.1% gain, up from 9.2% in the previous month.
Detroit was excluded, due to Covid-related data collection issues.
“2020′s 10.4% gain marks the best performance of housing prices in a calendar year since 2013,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
“From the perspective of more than 30 years of S&P CoreLogic Case-Shiller data, December’s year-over-year change ranks within the top decile of all reports.”
Phoenix, Seattle, and San Diego continued to show the strongest price gains among the 19 cities surveyed.
Year-over-year prices in Phoenix rose 14.4%.
In Seattle, they rose 13.6% and San Diego saw a 13% increase.
Eighteen of the 19 cities reported higher price increases in the 12 months ending December 2020 versus the 12 months ending November 2020.
“These data are consistent with the view that Covid has encouraged potential buyers to move from urban apartments to suburban homes."
"This may indicate a secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway,” Lazzara said.
Home prices began to see big gains last summer as Covid-driven demand from the stay-at-home culture descended on the housing market.
Record low supply combined with record low mortgage rates caused bidding wars on homes across the nation.
Mortgage rates turned sharply higher last week, which will cut into affordability heading into the 2021 spring market.
Prices generally lag sales, so if sales do suffer, the market is is unlikely to see significant cooling of prices for several months.
Data also provided by Reuters
https://www.cnbc.com/2021/02/23/decembe ... se-9-.html
"December home prices rose 10.4%, the biggest gain in 7 years, Case-Shiller says"
Diana Olick @in/dianaolick @DianaOlickCNBC @DianaOlick
Published Tue, Feb 23 2021
Key Points
* The 10-city composite annual increase was 9.8%, up from 8.9% in November.
* The 20-city composite posted a 10.1% gain, up from 9.2% in the previous month.
* Phoenix, Seattle, and San Diego continued to show the strongest price gains among the 19 cities surveyed.
December is usually the slowest month for the housing market, but price gains didn’t slow down one bit in 2020.
In fact, they rose at the fastest pace in seven years.
Home prices nationally increased 10.4% compared with December 2019, according to the S&P CoreLogic Case-Shiller Home Price Indices.
That is the strongest annual growth rate in over six years, and a significantly stronger gain than in November, when prices were up 9.5%.
It also ranks as one of the largest annual gains in the more than 30-year history of the index.
The 10-city composite annual increase was 9.8%, up from 8.9% in November.
The 20-city composite posted a 10.1% gain, up from 9.2% in the previous month.
Detroit was excluded, due to Covid-related data collection issues.
“2020′s 10.4% gain marks the best performance of housing prices in a calendar year since 2013,” said Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
“From the perspective of more than 30 years of S&P CoreLogic Case-Shiller data, December’s year-over-year change ranks within the top decile of all reports.”
Phoenix, Seattle, and San Diego continued to show the strongest price gains among the 19 cities surveyed.
Year-over-year prices in Phoenix rose 14.4%.
In Seattle, they rose 13.6% and San Diego saw a 13% increase.
Eighteen of the 19 cities reported higher price increases in the 12 months ending December 2020 versus the 12 months ending November 2020.
“These data are consistent with the view that Covid has encouraged potential buyers to move from urban apartments to suburban homes."
"This may indicate a secular shift in housing demand, or may simply represent an acceleration of moves that would have taken place over the next several years anyway,” Lazzara said.
Home prices began to see big gains last summer as Covid-driven demand from the stay-at-home culture descended on the housing market.
Record low supply combined with record low mortgage rates caused bidding wars on homes across the nation.
Mortgage rates turned sharply higher last week, which will cut into affordability heading into the 2021 spring market.
Prices generally lag sales, so if sales do suffer, the market is is unlikely to see significant cooling of prices for several months.
Data also provided by Reuters
https://www.cnbc.com/2021/02/23/decembe ... se-9-.html
Re: THE HOUSING MARKET
REUTERS
"Cold weather chills new U.S. home sales; current account deficit soars in 2020"
By Lucia Mutikani
March 23, 2021
WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell to a nine-month low in February amid bitterly cold weather, and expensive lumber and rising mortgage rates could cool the housing market this year.
The report from the Commerce Department on Tuesday followed on the heels of data this month showing a plunge in homebuilding and permits for future construction in February.
There has been demand for bigger houses to accommodate home offices and remote schooling as the COVID-19 pandemic lingers.
But a record jump in lumber prices and labor and land shortages is increasing costs for builders, hampering their ability to ramp up construction.
The dearth of homes is boosting house prices, which together with a sustained rise in mortgage rates since February, is making homeownership more expensive for first-time buyers.
“The residential housing market will continue to support economic growth, but risks are to the downside,” said Abbey Omodunbi, an economist at PNC Financial in Pittsburgh, Pennsylvania.
“The run-up in prices and rising mortgage rates will erode affordability and likely weaken demand in 2021.”
New home sales plunged 18.2% to a seasonally adjusted annual rate of 775,000 units last month.
Economists polled by Reuters had forecast new home sales would tumble 6.5% to a rate of 875,000 units in February.
Though new homes account for a small share of total sales, they are a leading indicator for the housing market as they are counted at the signing of a contract.
Sales decreased in all four regions.
New home sales are drawn from a sample of houses selected from single-family building permits, which dropped 10% in February.
Last month’s unseasonably cold weather, including severe winter storms in Texas and other parts of the densely populated South region, depressed retail sales, production at factories and homebuilding.
Warmer temperatures, an acceleration in the pace of coronavirus vaccinations and the White House’s $1.9 trillion COVID-19 pandemic rescue package are expected to spur a sharp rebound in economic activity in March.
New home sales increased 8.2% on a year-on-year basis in February, benefiting from an acute shortage of previously owned homes.
The National Association of Realtors reported on Monday that the inventory of existing homes remained stuck at record lows in February.
New home sales last month were concentrated in the $200,000-$749,000 price range.
Sales in the below-$200,000 price bracket, the sought-after segment of the market, accounted for only 4% of transactions last month.
Stocks on Wall Street slipped.
The dollar rose against a basket of currencies.
U.S. Treasury prices were higher.
EXPENSIVE LUMBER
The 30-year fixed-rate mortgage has risen to a nine-month high of 3.09%, according to data from mortgage finance agency Freddie Mac.
Mortgage rates have risen in tandem with U.S. Treasury yields, which have spiked in anticipation of stronger economic growth this year and higher inflation from the massive fiscal stimulus.
The cost of softwood lumber surged a record 79.7% on a year-on-year basis in February.
According to the National Association of Home Builders, that was adding about $24,000 to the price of a new home.
The median new home house price jumped 5.3% from a year ago to $349,400 in February.
“Rising mortgage rates will likely soften homebuyer demand modestly, while homebuilder constraints, including the ongoing high prices of lumber and other materials, will likely dampen the supply of new homes,” said Doug Duncan, chief economist at Fannie Mae in Washington.
“However, underlying demand remains strong."
"The extremely tight supply of existing homes for sale may encourage more homebuyers to turn to new home purchases.”
There were 312,000 new homes on the market last month, up from 304,000 in January.
At February’s sales pace it would take 4.8 months to clear the supply of houses on the market, up from 3.8 months in January.
About 73% of homes sold last month were either under construction or yet to be built.
Separately on Tuesday, the Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, surged 34.8% to a 12-year high of $647.2 billion in 2020 as the pandemic severely disrupted exports.
The deficit could remain big this year as the stimulus-driven economic recovery draws in imports.
The current account gap represented 3.1% of gross domestic product last year, also the largest share since 2008 and up from 2.2% in 2019.
The wider deficit is likely not an issue for the United States because of the dollar’s status as the world’s reserve currency.
“Early 2021 data shows the trade recovery continuing in the first quarter, but it will take time to return to pre-COVID conditions since the pandemic isn’t over yet and stretched supply chains are inhibiting progress,” said Oren Klachkin, lead U.S. economist at Oxford Economics in New York.
“Looking ahead, we expect the current account deficit to widen slightly and average 3.5% of GDP in 2021 as positive recovery dynamics and generous fiscal stimulus maintain a strong pull on imports while exports recover more slowly.”
Economic growth this year is expected to top 7%.
That would be the fastest growth since 1984 and would follow a 3.5% contraction last year, the worst performance in 74 years.
Reporting by Lucia Mutikani; Editing by Andrew Heavens, Paul Simao and Andrea Ricci
https://www.reuters.com/article/us-usa- ... SKBN2BF1OV
"Cold weather chills new U.S. home sales; current account deficit soars in 2020"
By Lucia Mutikani
March 23, 2021
WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell to a nine-month low in February amid bitterly cold weather, and expensive lumber and rising mortgage rates could cool the housing market this year.
The report from the Commerce Department on Tuesday followed on the heels of data this month showing a plunge in homebuilding and permits for future construction in February.
There has been demand for bigger houses to accommodate home offices and remote schooling as the COVID-19 pandemic lingers.
But a record jump in lumber prices and labor and land shortages is increasing costs for builders, hampering their ability to ramp up construction.
The dearth of homes is boosting house prices, which together with a sustained rise in mortgage rates since February, is making homeownership more expensive for first-time buyers.
“The residential housing market will continue to support economic growth, but risks are to the downside,” said Abbey Omodunbi, an economist at PNC Financial in Pittsburgh, Pennsylvania.
“The run-up in prices and rising mortgage rates will erode affordability and likely weaken demand in 2021.”
New home sales plunged 18.2% to a seasonally adjusted annual rate of 775,000 units last month.
Economists polled by Reuters had forecast new home sales would tumble 6.5% to a rate of 875,000 units in February.
Though new homes account for a small share of total sales, they are a leading indicator for the housing market as they are counted at the signing of a contract.
Sales decreased in all four regions.
New home sales are drawn from a sample of houses selected from single-family building permits, which dropped 10% in February.
Last month’s unseasonably cold weather, including severe winter storms in Texas and other parts of the densely populated South region, depressed retail sales, production at factories and homebuilding.
Warmer temperatures, an acceleration in the pace of coronavirus vaccinations and the White House’s $1.9 trillion COVID-19 pandemic rescue package are expected to spur a sharp rebound in economic activity in March.
New home sales increased 8.2% on a year-on-year basis in February, benefiting from an acute shortage of previously owned homes.
The National Association of Realtors reported on Monday that the inventory of existing homes remained stuck at record lows in February.
New home sales last month were concentrated in the $200,000-$749,000 price range.
Sales in the below-$200,000 price bracket, the sought-after segment of the market, accounted for only 4% of transactions last month.
Stocks on Wall Street slipped.
The dollar rose against a basket of currencies.
U.S. Treasury prices were higher.
EXPENSIVE LUMBER
The 30-year fixed-rate mortgage has risen to a nine-month high of 3.09%, according to data from mortgage finance agency Freddie Mac.
Mortgage rates have risen in tandem with U.S. Treasury yields, which have spiked in anticipation of stronger economic growth this year and higher inflation from the massive fiscal stimulus.
The cost of softwood lumber surged a record 79.7% on a year-on-year basis in February.
According to the National Association of Home Builders, that was adding about $24,000 to the price of a new home.
The median new home house price jumped 5.3% from a year ago to $349,400 in February.
“Rising mortgage rates will likely soften homebuyer demand modestly, while homebuilder constraints, including the ongoing high prices of lumber and other materials, will likely dampen the supply of new homes,” said Doug Duncan, chief economist at Fannie Mae in Washington.
“However, underlying demand remains strong."
"The extremely tight supply of existing homes for sale may encourage more homebuyers to turn to new home purchases.”
There were 312,000 new homes on the market last month, up from 304,000 in January.
At February’s sales pace it would take 4.8 months to clear the supply of houses on the market, up from 3.8 months in January.
About 73% of homes sold last month were either under construction or yet to be built.
Separately on Tuesday, the Commerce Department said the current account deficit, which measures the flow of goods, services and investments into and out of the country, surged 34.8% to a 12-year high of $647.2 billion in 2020 as the pandemic severely disrupted exports.
The deficit could remain big this year as the stimulus-driven economic recovery draws in imports.
The current account gap represented 3.1% of gross domestic product last year, also the largest share since 2008 and up from 2.2% in 2019.
The wider deficit is likely not an issue for the United States because of the dollar’s status as the world’s reserve currency.
“Early 2021 data shows the trade recovery continuing in the first quarter, but it will take time to return to pre-COVID conditions since the pandemic isn’t over yet and stretched supply chains are inhibiting progress,” said Oren Klachkin, lead U.S. economist at Oxford Economics in New York.
“Looking ahead, we expect the current account deficit to widen slightly and average 3.5% of GDP in 2021 as positive recovery dynamics and generous fiscal stimulus maintain a strong pull on imports while exports recover more slowly.”
Economic growth this year is expected to top 7%.
That would be the fastest growth since 1984 and would follow a 3.5% contraction last year, the worst performance in 74 years.
Reporting by Lucia Mutikani; Editing by Andrew Heavens, Paul Simao and Andrea Ricci
https://www.reuters.com/article/us-usa- ... SKBN2BF1OV
Re: THE HOUSING MARKET
REUTERS
"U.S. consumer confidence hits one-year high; house prices soar"
By Lucia Mutikani
March 30, 2021
WASHINGTON (Reuters) -U.S. consumer confidence raced in March to its highest level since the start of the COVID-19 pandemic, supporting views that economic growth will accelerate in the coming months, driven by more fiscal stimulus and an improving public health situation.
The survey from the Conference Board on Tuesday also showed consumers were fairly upbeat about the labor market, with a measure of household employment rebounding after declining in February.
Restrictions on non-essential businesses are being rolled back as more Americans get vaccinated against COVID-19.
That, along with the White House’s massive $1.9 trillion pandemic relief package, has led economists to predict the economy will this year experience it best performance in nearly four decades.
The survey showed more consumers intended to buy homes, cars and household appliances over the next six months.
“Consumers finally are fully on board with the pending expansion,” said Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia.
“What remains to be seen is how quickly services industries such as travel and leisure will open up, allowing venues for consumers to release their pent-up demand.”
The Conference Board’s consumer confidence index jumped 19.3 points to a reading of 109.7 this month, the highest level since the onset of the pandemic in March 2020.
The increase was the largest since April 2003.
Confidence remains well below its lofty reading of 132.6 in February 2020.
Economists polled by Reuters had forecast the index would rise to 96.9.
The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, soared to a reading of 110.0 from 89.6 last month.
The expectations index, based on consumers’ short-term outlook for income, business and labor market conditions increased to 109.6 from a reading of 90.9 in February.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury prices were largely lower.
INFLATION WORRIES
The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, rebounded to a reading of 7.8 this month from -0.8 in February.
That measure closely correlates to the unemployment rate in the Labor Department’s employment report.
That fits in with expectations for a sharp acceleration in job growth this month.
According to a Reuters survey of economists, nonfarm payrolls likely increased by 639,000 jobs in March after rising by 379,000 in February.
The government is due to publish its closely-watched employment report for March on Friday.
The share of consumers expecting an increase in income over the next six months rose to 15.5% from 14.8% last month.
The proportion anticipating a drop increased to 13.3% from 12.9% in February.
More consumers expected to purchase homes, motor vehicles and major household appliances compared to February.
Consumers’ inflation expectations over the next 12 months increased to 6.7% from 6.5% in February.
“Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items,” said Lynn Franco, senior director of economic indicators at the Conference Board.
“However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.”
The rise in house-buying intentions suggests demand for homes could remain strong and continue to drive up prices as supply remains tight.
The housing market is being powered by demand for more spacious accommodations for home offices and schooling.
It remains strong despite a rise in mortgage rates this year.
A separate report on Tuesday showed the S&P CoreLogic Case-Shiller 20-metro-area house price index soared 11.1% in January from a year ago, the fastest in 15 years, after increasing 10.2% in December.
“A wave of eager buyers is being forced to act swiftly and face heightened competition for the few homes available,” said Matthew Speakman, an economist at Zillow.
“The combined dynamic is pushing prices upward at their strongest pace in years, and it doesn’t appear that there is an end in sight.”
Reporting by Lucia Mutikani
Editing by Chizu Nomiyama and Paul Simao
https://www.reuters.com/article/us-usa- ... SKBN2BM238
"U.S. consumer confidence hits one-year high; house prices soar"
By Lucia Mutikani
March 30, 2021
WASHINGTON (Reuters) -U.S. consumer confidence raced in March to its highest level since the start of the COVID-19 pandemic, supporting views that economic growth will accelerate in the coming months, driven by more fiscal stimulus and an improving public health situation.
The survey from the Conference Board on Tuesday also showed consumers were fairly upbeat about the labor market, with a measure of household employment rebounding after declining in February.
Restrictions on non-essential businesses are being rolled back as more Americans get vaccinated against COVID-19.
That, along with the White House’s massive $1.9 trillion pandemic relief package, has led economists to predict the economy will this year experience it best performance in nearly four decades.
The survey showed more consumers intended to buy homes, cars and household appliances over the next six months.
“Consumers finally are fully on board with the pending expansion,” said Robert Frick, corporate economist with Navy Federal Credit Union in Vienna, Virginia.
“What remains to be seen is how quickly services industries such as travel and leisure will open up, allowing venues for consumers to release their pent-up demand.”
The Conference Board’s consumer confidence index jumped 19.3 points to a reading of 109.7 this month, the highest level since the onset of the pandemic in March 2020.
The increase was the largest since April 2003.
Confidence remains well below its lofty reading of 132.6 in February 2020.
Economists polled by Reuters had forecast the index would rise to 96.9.
The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, soared to a reading of 110.0 from 89.6 last month.
The expectations index, based on consumers’ short-term outlook for income, business and labor market conditions increased to 109.6 from a reading of 90.9 in February.
Stocks on Wall Street were trading lower.
The dollar rose against a basket of currencies.
U.S. Treasury prices were largely lower.
INFLATION WORRIES
The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, rebounded to a reading of 7.8 this month from -0.8 in February.
That measure closely correlates to the unemployment rate in the Labor Department’s employment report.
That fits in with expectations for a sharp acceleration in job growth this month.
According to a Reuters survey of economists, nonfarm payrolls likely increased by 639,000 jobs in March after rising by 379,000 in February.
The government is due to publish its closely-watched employment report for March on Friday.
The share of consumers expecting an increase in income over the next six months rose to 15.5% from 14.8% last month.
The proportion anticipating a drop increased to 13.3% from 12.9% in February.
More consumers expected to purchase homes, motor vehicles and major household appliances compared to February.
Consumers’ inflation expectations over the next 12 months increased to 6.7% from 6.5% in February.
“Consumers’ renewed optimism boosted their purchasing intentions for homes, autos and several big-ticket items,” said Lynn Franco, senior director of economic indicators at the Conference Board.
“However, concerns of inflation in the short-term rose, most likely due to rising prices at the pump, and may temper spending intentions in the months ahead.”
The rise in house-buying intentions suggests demand for homes could remain strong and continue to drive up prices as supply remains tight.
The housing market is being powered by demand for more spacious accommodations for home offices and schooling.
It remains strong despite a rise in mortgage rates this year.
A separate report on Tuesday showed the S&P CoreLogic Case-Shiller 20-metro-area house price index soared 11.1% in January from a year ago, the fastest in 15 years, after increasing 10.2% in December.
“A wave of eager buyers is being forced to act swiftly and face heightened competition for the few homes available,” said Matthew Speakman, an economist at Zillow.
“The combined dynamic is pushing prices upward at their strongest pace in years, and it doesn’t appear that there is an end in sight.”
Reporting by Lucia Mutikani
Editing by Chizu Nomiyama and Paul Simao
https://www.reuters.com/article/us-usa- ... SKBN2BM238
Re: THE HOUSING MARKET
CNBC
"Critics slam the Fed as home prices rise at a historic rate"
Diana Olick @in/dianaolick @DianaOlickCNBC @DianaOlick
Published Tue, Mar 30 2021
Key Points
* Home prices nationally in January were up 11.2% year over year, according to the latest S&P CoreLogic Case-Shiller Index. That is the largest annual gain in nearly 15 years.
* As of last week the Federal Reserve held $2.2 trillion of agency mortgage-backed securities.
* “They’ve continued on autopilot. I don’t think there’s been any discussion within the Fed,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Home price gains are accelerating at an alarming pace, fueled by Covid pandemic-related inflation, which some claim is not getting enough attention from the Federal Reserve.
Home prices nationally in January rose 11.2% year over year, according to the latest S&P CoreLogic Case-Shiller Index.
That is the largest annual gain in nearly 15 years.
As a comparison, annual price gains were 10.4% in December, 9.5% in November, 8.4% in October, 7% in September, 5.8% in August and 4.8% last July.
In January 2020, the annual gain was just 3.9%, and the monthly moves were in small fractions, not whole percentage points.
“In more than 30 years of S&P CoreLogic Case-Shiller data, January’s year-over-year change is comfortably in the top decile."
"That strength is reflected across all 20 cities,” noted Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
“January’s price gains in every city are above that city’s median level, and rank in the top quartile of all reports in 18 cities.”
The main reason home prices are now rising so quickly is that strong demand butting up against record low supply.
Bidding wars for homes are now the rule, not the exception.
But mortgage rates are also playing a key role, one engineered by the Federal Reserve.
While rates are rising slightly now, they are still near historic lows, having set more than a dozen new lows last year.
Mortgage rates loosely follow the yield on the 10-year Treasury note, which has fallen dramatically during the pandemic.
Mortgage rates are also influenced by the purchases and yields of agency mortgage-backed securities, or MBS.
These purchases provide the mortgage market with liquidity.
The Federal Reserve had been tapering its purchases of MBS in order to normalize the market after the last recession, but it turned that taper around last March with the onset of the pandemic.
It now owns more than a third of the MBS market.
At the start of 2019, the Fed held $1.6 trillion in agency MBS.
It tapered that down to $1.37 trillion by mid-March of 2020.
Then, when the economy and housing market were suddenly in Covid free fall, the central bank began buying more again.
As of last week, the Fed held $2.2 trillion of agency MBS.
“They’ve continued on autopilot."
"I don’t think there’s been any discussion within the Fed."
"The Fed is just afraid to change because they don’t want it to be seen as a form of taking their foot off the pedal,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
The housing market has, in turn, blasted off.
The stay-at-home culture of the pandemic hit consumers literally where they live, and demand for housing has yet to ease up.
Low mortgage rates only added fuel to the fire.
“Again, why is the Fed still buying MBS?"
"As home price changes are not included in either CPI or PCE, the question is when and how this filters into imputed rent, but inflation is real for those looking to buy a home,” said Boockvar.
“The Fed again is responsible for pricing out first-time buyers.”
A Fed spokesman declined to comment.
But what if the Fed tapered its purchases again, or stopped buying MBS altogether?
“Is there some sort of liquidity breakdown or crisis of confidence that sends a shockwave throughout financial markets?"
"We’ve seen that happen before and it results in rates moving lower for organic reasons, but without the benefit of simultaneous strength in financial markets,” said Matthew Graham, chief operating officer at Mortgage News Daily.
“With or without the Fed, rates were low because of the pandemic."
"Mortgage rates are exactly as far away from 10-year Treasury yields as they have been for the past decade (and they never broke below that historical range in the past year)."
"Rates are rising due to light at the end of the tunnel,” Graham said.
The best case for cold water on home prices, then, is simply more supply on the market and less demand.
Sellers have been very slow to act this spring, but buyers are starting to pull back, some priced out of the homes they would like to purchase.
“Affordability crunch resulting from strong home price growth and higher mortgage rates will discourage some potential home buyers from entering the market and take some wind out of its sails, slowing the home price growth rate by about a half by the end of 2021,” said Selma Hepp, deputy chief economist at CoreLogic.
The lack of homes for sale remains the biggest concern, she added.
“Potential sellers may be discouraged by their inability to find a new home and subsequently choose to not list their own home – leading to a vicious cycle of declining for-sale homes,” Hepp said.
Data also provided by Reuters
https://www.cnbc.com/2021/03/30/federal ... -soar.html
"Critics slam the Fed as home prices rise at a historic rate"
Diana Olick @in/dianaolick @DianaOlickCNBC @DianaOlick
Published Tue, Mar 30 2021
Key Points
* Home prices nationally in January were up 11.2% year over year, according to the latest S&P CoreLogic Case-Shiller Index. That is the largest annual gain in nearly 15 years.
* As of last week the Federal Reserve held $2.2 trillion of agency mortgage-backed securities.
* “They’ve continued on autopilot. I don’t think there’s been any discussion within the Fed,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Home price gains are accelerating at an alarming pace, fueled by Covid pandemic-related inflation, which some claim is not getting enough attention from the Federal Reserve.
Home prices nationally in January rose 11.2% year over year, according to the latest S&P CoreLogic Case-Shiller Index.
That is the largest annual gain in nearly 15 years.
As a comparison, annual price gains were 10.4% in December, 9.5% in November, 8.4% in October, 7% in September, 5.8% in August and 4.8% last July.
In January 2020, the annual gain was just 3.9%, and the monthly moves were in small fractions, not whole percentage points.
“In more than 30 years of S&P CoreLogic Case-Shiller data, January’s year-over-year change is comfortably in the top decile."
"That strength is reflected across all 20 cities,” noted Craig Lazzara, managing director and global head of index investment strategy at S&P Dow Jones Indices.
“January’s price gains in every city are above that city’s median level, and rank in the top quartile of all reports in 18 cities.”
The main reason home prices are now rising so quickly is that strong demand butting up against record low supply.
Bidding wars for homes are now the rule, not the exception.
But mortgage rates are also playing a key role, one engineered by the Federal Reserve.
While rates are rising slightly now, they are still near historic lows, having set more than a dozen new lows last year.
Mortgage rates loosely follow the yield on the 10-year Treasury note, which has fallen dramatically during the pandemic.
Mortgage rates are also influenced by the purchases and yields of agency mortgage-backed securities, or MBS.
These purchases provide the mortgage market with liquidity.
The Federal Reserve had been tapering its purchases of MBS in order to normalize the market after the last recession, but it turned that taper around last March with the onset of the pandemic.
It now owns more than a third of the MBS market.
At the start of 2019, the Fed held $1.6 trillion in agency MBS.
It tapered that down to $1.37 trillion by mid-March of 2020.
Then, when the economy and housing market were suddenly in Covid free fall, the central bank began buying more again.
As of last week, the Fed held $2.2 trillion of agency MBS.
“They’ve continued on autopilot."
"I don’t think there’s been any discussion within the Fed."
"The Fed is just afraid to change because they don’t want it to be seen as a form of taking their foot off the pedal,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
The housing market has, in turn, blasted off.
The stay-at-home culture of the pandemic hit consumers literally where they live, and demand for housing has yet to ease up.
Low mortgage rates only added fuel to the fire.
“Again, why is the Fed still buying MBS?"
"As home price changes are not included in either CPI or PCE, the question is when and how this filters into imputed rent, but inflation is real for those looking to buy a home,” said Boockvar.
“The Fed again is responsible for pricing out first-time buyers.”
A Fed spokesman declined to comment.
But what if the Fed tapered its purchases again, or stopped buying MBS altogether?
“Is there some sort of liquidity breakdown or crisis of confidence that sends a shockwave throughout financial markets?"
"We’ve seen that happen before and it results in rates moving lower for organic reasons, but without the benefit of simultaneous strength in financial markets,” said Matthew Graham, chief operating officer at Mortgage News Daily.
“With or without the Fed, rates were low because of the pandemic."
"Mortgage rates are exactly as far away from 10-year Treasury yields as they have been for the past decade (and they never broke below that historical range in the past year)."
"Rates are rising due to light at the end of the tunnel,” Graham said.
The best case for cold water on home prices, then, is simply more supply on the market and less demand.
Sellers have been very slow to act this spring, but buyers are starting to pull back, some priced out of the homes they would like to purchase.
“Affordability crunch resulting from strong home price growth and higher mortgage rates will discourage some potential home buyers from entering the market and take some wind out of its sails, slowing the home price growth rate by about a half by the end of 2021,” said Selma Hepp, deputy chief economist at CoreLogic.
The lack of homes for sale remains the biggest concern, she added.
“Potential sellers may be discouraged by their inability to find a new home and subsequently choose to not list their own home – leading to a vicious cycle of declining for-sale homes,” Hepp said.
Data also provided by Reuters
https://www.cnbc.com/2021/03/30/federal ... -soar.html
Re: THE HOUSING MARKET
CNBC
"Pending home sales fell over 10% in February, as record low supply stifles the housing market"
Diana Olick @in/dianaolick @DianaOlickCNBC @DianaOlick
Published Wed, Mar 31 2021
Key Points
* Pending home sales, a measure of signed contracts on existing homes, fell 10.6% in February compared with January, according to the National Association of Realtors.
* Sales were 0.5% lower year over year.
* Sales are now varying dramatically by price point, because supply is so lean on the low end and more plentiful on the higher end.
The U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales.
Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the National Association of Realtors.
Sales were 0.5% lower year over year.
“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift,” said the Realtor’s chief economist, Lawrence Yun.
“But contracts are not clicking due to record-low inventory.”
There were just 1.03 million homes for sale at the end of February, a 29.5% drop compared with February 2020.
That is the largest annual decline ever and the lowest supply on record.
Sales are now varying dramatically by price point because supply is so lean on the low end and more plentiful on the higher end.
Homes priced above $250,000 have seen the most active sales, but Yun notes that homes priced above $500,000 to less than $1 million are starting to see the same low inventory problems.
“Potential buyers may have to enlarge their geographic search areas, given the current tight market,” Yun said.
“If there were a larger pool of inventory to select from – ideally a five- or a six-month supply – then more buyers would be able to purchase properties at an affordable price.”
A recent rise in mortgage rates does not appear to be affecting homebuyer demand that much.
The average rate on the popular 30-year fixed loan started the year below 3% and is now at 3.45%, according to Mortgage News Daily.
That is still low, historically speaking.
Home prices, however, are climbing quickly.
They are up more than 11% from a year ago, according to the latest S&P CoreLogic Case-Shiller home price index.
The price increases are strongest at the lower end of the market, where supply is weakest and bidding wars are rampant.
Regionally, pending home sales in the Northeast fell 9.2% month to month and were 3.9% lower year over year.
In the Midwest sales fell 9.5% for the month and were down 6.1% from February 2020.
Sales in the South declined 13% monthly and were higher by 2.9% annually.
In the West, sales fell 7.4% from January and were up 1.9% from a year ago.
Data also provided by Reuters
https://www.cnbc.com/2021/03/31/pending ... 1617199371
"Pending home sales fell over 10% in February, as record low supply stifles the housing market"
Diana Olick @in/dianaolick @DianaOlickCNBC @DianaOlick
Published Wed, Mar 31 2021
Key Points
* Pending home sales, a measure of signed contracts on existing homes, fell 10.6% in February compared with January, according to the National Association of Realtors.
* Sales were 0.5% lower year over year.
* Sales are now varying dramatically by price point, because supply is so lean on the low end and more plentiful on the higher end.
The U.S. housing market is suffering from its lowest supply in history, and that is taking an increasingly hard toll on sales.
Pending home sales, a measure of signed contracts on existing homes, fell a wider-than-expected 10.6% in February compared with January, according to the National Association of Realtors.
Sales were 0.5% lower year over year.
“The demand for a home purchase is widespread, multiple offers are prevalent, and days-on-market are swift,” said the Realtor’s chief economist, Lawrence Yun.
“But contracts are not clicking due to record-low inventory.”
There were just 1.03 million homes for sale at the end of February, a 29.5% drop compared with February 2020.
That is the largest annual decline ever and the lowest supply on record.
Sales are now varying dramatically by price point because supply is so lean on the low end and more plentiful on the higher end.
Homes priced above $250,000 have seen the most active sales, but Yun notes that homes priced above $500,000 to less than $1 million are starting to see the same low inventory problems.
“Potential buyers may have to enlarge their geographic search areas, given the current tight market,” Yun said.
“If there were a larger pool of inventory to select from – ideally a five- or a six-month supply – then more buyers would be able to purchase properties at an affordable price.”
A recent rise in mortgage rates does not appear to be affecting homebuyer demand that much.
The average rate on the popular 30-year fixed loan started the year below 3% and is now at 3.45%, according to Mortgage News Daily.
That is still low, historically speaking.
Home prices, however, are climbing quickly.
They are up more than 11% from a year ago, according to the latest S&P CoreLogic Case-Shiller home price index.
The price increases are strongest at the lower end of the market, where supply is weakest and bidding wars are rampant.
Regionally, pending home sales in the Northeast fell 9.2% month to month and were 3.9% lower year over year.
In the Midwest sales fell 9.5% for the month and were down 6.1% from February 2020.
Sales in the South declined 13% monthly and were higher by 2.9% annually.
In the West, sales fell 7.4% from January and were up 1.9% from a year ago.
Data also provided by Reuters
https://www.cnbc.com/2021/03/31/pending ... 1617199371
Re: THE HOUSING MARKET
REUTERS
"U.S. housing starts near 15-year high; consumer sentiment rises moderately"
Lucia Mutikani
April 16, 2021
U.S. homebuilding surged to nearly a 15-year high in March, but soaring lumber prices amid supply constraints could limit builders' capacity to boost production and ease a shortage of homes that is threatening to slow housing market momentum.
The sharp rebound reported by the Commerce Department on Friday added to robust retail sales in March in suggesting that the economy was roaring after a brief weather-related setback in February.
Increasing COVID-19 vaccinations, warmer weather and massive fiscal stimulus are driving the economy, with growth this year expected to be the strongest in nearly four decades.
But caution is starting to creep in among consumers as the course of the pandemic remains uncertain and inflation is showing signs of heating up.
Other data on Friday showed consumer sentiment rose moderately in early April.
"We're in a unique situation with the economy beginning to rebound from the worst of the pandemic," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
"Uncertainties remain, with many businesses yet to reopen, unemployment still high, and COVID-19 levels lower but persistent."
Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006.
Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.
Starts soared 37.0% on a year-on-year basis in March.
Homebuilding slumped in February as large parts of the country reeled from unseasonably cold weather, including winter storms in Texas and other parts of the densely-populated South region.
Groundbreaking activity increased in the Northeast, Midwest and South, but fell in the West.
Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February's 8.8% plunge.
They jumped 30.2% compared to March 2020.
"While housing demand is expected to remain strong, we expect it to diminish somewhat as the year progresses," said Doug Duncan, chief economist at Fannie Mae in Washington.
"Homebuilders continue to face supply constraints, including increasing prices of lumber and other materials."
Stocks on Wall Street were mostly higher, with the S&P 500 index and the Dow Jones Industrial Average hitting fresh record highs.
The dollar slipped against a basket of currencies.
U.S. Treasury prices were lower.
RECORD LUMBER PRICES
The housing market is being fueled by demand for bigger and more expensive accommodations, with millions of Americans continuing to work from home and remote schooling remaining in place as the pandemic enters its second year.
Housing supply has been insufficient, with the inventory of previously-owned homes at record lows.
This is underpinning homebuilding.
A survey from the National Association of Home Builders on Thursday showed confidence among single-family homebuilders increased in April amid strong buyer traffic.
Builders appealed for solutions "to increase the supply of building materials as the economy runs hot in 2021."
Inflation concerns were on consumers' minds early this month.
A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March.
Economists had forecast the index would rise to 89.6.
The survey's one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March.
Its five-year inflation outlook was unchanged at 2.7%.
Reports this month showed big increases in both consumer and producer prices in March as strong domestic demand pushed against supply constraints.
Federal Reserve Chair Jerome Powell and many economists view higher inflation as transitory, with supply chains expected to adapt and become more efficient.
Supply disruptions because of coronavirus-related restrictions are driving up commodity prices.
Softwood lumber, which is used for frames and trusses of houses, surged by a record 83.4% on a year-on-year basis in March, according to the latest producer price data published last week.
Prices of other building materials such as plywood have also risen sharply.
Port congestion on the West Coast as well as winter weather in Canada that has shut mills and restricted truck shipping were also contributing to the shortages that were driving prices of building materials higher, according to an Institute for Supply Management survey published early this month.
Single-family homebuilding, the largest share of the housing market, surged 15.3% to a rate of 1.238 million units in March.
Still, starts remained below last December's peak, likely constrained by the more expensive building materials.
Single-family building permits rose 4.6% to a rate of 1.199 million units.
"The failure of single-family starts to fully recover to last winter's peak level despite tight inventories in most metropolitan areas supports the idea builders are holding back," said Chris Low, chief economist at FHN Financial in New York.
Starts for the volatile multi-family segment soared 30.8% to a pace of 501,000 units.
Building permits for multi-family housing projects fell 1.2% to a pace of 567,000 units.
Housing completions accelerated 16.6% to a rate of 1.580 million units last month, the highest since March 2007.
Single-family home completions shot up 5.3% to a rate of 1.099 million, the highest since November 2007.
Realtors estimate that single-family housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to close the inventory gap.
The stock of housing under construction rose 0.8% to a rate of 1.306 million units, the highest since September 2006.
https://www.reuters.com/business/us-hou ... 021-04-16/
"U.S. housing starts near 15-year high; consumer sentiment rises moderately"
Lucia Mutikani
April 16, 2021
U.S. homebuilding surged to nearly a 15-year high in March, but soaring lumber prices amid supply constraints could limit builders' capacity to boost production and ease a shortage of homes that is threatening to slow housing market momentum.
The sharp rebound reported by the Commerce Department on Friday added to robust retail sales in March in suggesting that the economy was roaring after a brief weather-related setback in February.
Increasing COVID-19 vaccinations, warmer weather and massive fiscal stimulus are driving the economy, with growth this year expected to be the strongest in nearly four decades.
But caution is starting to creep in among consumers as the course of the pandemic remains uncertain and inflation is showing signs of heating up.
Other data on Friday showed consumer sentiment rose moderately in early April.
"We're in a unique situation with the economy beginning to rebound from the worst of the pandemic," said Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
"Uncertainties remain, with many businesses yet to reopen, unemployment still high, and COVID-19 levels lower but persistent."
Housing starts surged 19.4% to a seasonally adjusted annual rate of 1.739 million units last month, the highest level since June 2006.
Economists polled by Reuters had forecast starts would rise to a rate of 1.613 million units in March.
Starts soared 37.0% on a year-on-year basis in March.
Homebuilding slumped in February as large parts of the country reeled from unseasonably cold weather, including winter storms in Texas and other parts of the densely-populated South region.
Groundbreaking activity increased in the Northeast, Midwest and South, but fell in the West.
Permits for future home building rose 2.7% to a rate of 1.766 million units last month, recouping only a fraction of February's 8.8% plunge.
They jumped 30.2% compared to March 2020.
"While housing demand is expected to remain strong, we expect it to diminish somewhat as the year progresses," said Doug Duncan, chief economist at Fannie Mae in Washington.
"Homebuilders continue to face supply constraints, including increasing prices of lumber and other materials."
Stocks on Wall Street were mostly higher, with the S&P 500 index and the Dow Jones Industrial Average hitting fresh record highs.
The dollar slipped against a basket of currencies.
U.S. Treasury prices were lower.
RECORD LUMBER PRICES
The housing market is being fueled by demand for bigger and more expensive accommodations, with millions of Americans continuing to work from home and remote schooling remaining in place as the pandemic enters its second year.
Housing supply has been insufficient, with the inventory of previously-owned homes at record lows.
This is underpinning homebuilding.
A survey from the National Association of Home Builders on Thursday showed confidence among single-family homebuilders increased in April amid strong buyer traffic.
Builders appealed for solutions "to increase the supply of building materials as the economy runs hot in 2021."
Inflation concerns were on consumers' minds early this month.
A separate report from the University of Michigan on Friday showed its preliminary consumer sentiment index rose to 86.5 from a final reading of 84.9 in March.
Economists had forecast the index would rise to 89.6.
The survey's one-year inflation expectation jumped to 3.7%, the highest level in nearly a decade, from 3.1% in March.
Its five-year inflation outlook was unchanged at 2.7%.
Reports this month showed big increases in both consumer and producer prices in March as strong domestic demand pushed against supply constraints.
Federal Reserve Chair Jerome Powell and many economists view higher inflation as transitory, with supply chains expected to adapt and become more efficient.
Supply disruptions because of coronavirus-related restrictions are driving up commodity prices.
Softwood lumber, which is used for frames and trusses of houses, surged by a record 83.4% on a year-on-year basis in March, according to the latest producer price data published last week.
Prices of other building materials such as plywood have also risen sharply.
Port congestion on the West Coast as well as winter weather in Canada that has shut mills and restricted truck shipping were also contributing to the shortages that were driving prices of building materials higher, according to an Institute for Supply Management survey published early this month.
Single-family homebuilding, the largest share of the housing market, surged 15.3% to a rate of 1.238 million units in March.
Still, starts remained below last December's peak, likely constrained by the more expensive building materials.
Single-family building permits rose 4.6% to a rate of 1.199 million units.
"The failure of single-family starts to fully recover to last winter's peak level despite tight inventories in most metropolitan areas supports the idea builders are holding back," said Chris Low, chief economist at FHN Financial in New York.
Starts for the volatile multi-family segment soared 30.8% to a pace of 501,000 units.
Building permits for multi-family housing projects fell 1.2% to a pace of 567,000 units.
Housing completions accelerated 16.6% to a rate of 1.580 million units last month, the highest since March 2007.
Single-family home completions shot up 5.3% to a rate of 1.099 million, the highest since November 2007.
Realtors estimate that single-family housing starts and completion rates need to be in a range of 1.5 million to 1.6 million units per month to close the inventory gap.
The stock of housing under construction rose 0.8% to a rate of 1.306 million units, the highest since September 2006.
https://www.reuters.com/business/us-hou ... 021-04-16/
Re: THE HOUSING MARKET
REUTERS
"U.S. manufacturing, new homes sales underscore booming economy"
Lucia Mutikani
April 23, 2021
U.S. factory activity powered ahead in early April, though manufacturers increasingly struggled to source raw materials and other inputs as a reopening economy leads to a boom in domestic demand, which could slow momentum in the months ahead.
The flow of strong economic data continued with another report on Friday showing new home sales racing to a more than 14-1/2-year high in March.
The economy is being boosted by the White House's massive $1.9 trillion COVID-19 pandemic rescue package and increased vaccinations against the virus.
Retail sales jumped to a record high in March and hiring accelerated, cementing expectations for robust growth in the first quarter and setting up the economy for what could be its best performance in nearly four decades.
Data firm IHS Markit said its flash U.S. manufacturing PMI increased to 60.6 in the first half of this month.
That was the highest reading since the series started in May 2007 and followed 59.1 in March.
Economists polled by Reuters had forecast the index rising to 60.5 in early April.
A reading above 50 indicates growth in manufacturing, which accounts for 11.9% of the U.S. economy.
"The U.S. economy is enjoying a strong start to the second quarter, firing on all cylinders as loosening virus restrictions, an impressive vaccine roll-out, a brighter outlook and stimulus measures all helped boost demand," said Chris Williamson, chief business economist at IHS Markit.
More than half of American adults have had at least one vaccine dose, according to the U.S. Centers for Disease Control and Prevention (CDC).
A third of U.S. adults are fully vaccinated.
That, together with the fiscal stimulus, has allowed for broader economic re-engagement.
But the strong demand is pushing against supply constraints.
The pandemic has disrupted labor at factories and their suppliers, causing shortages that are boosting prices of materials and other inputs.
The IHS Markit survey’s measure of prices paid by manufacturers jumped to the highest level since July 2008.
It attributed the higher input prices to “severe supplier shortages and marked rises in transportation fees.”
The continued rise in input costs is one of many factors expected to drive inflation above the Federal Reserve's 2% inflation target this year.
Fed Chair Jerome Powell has expressed confidence that the supply chains will adapt and become more efficient, and prevent prices from remaining higher for a sustained period.
According to IHS Market supply shortages were causing backlogs of uncompleted work "of a magnitude not surpassed for over seven years."
The raw material squeeze is most evident in the automobile industry, where a global semiconductor shortage has forced production cuts at motor vehicle assembly plants.
Supply challenges have also spilled over to the housing market, where builders are struggling with record lumber prices, threatening to worsen an already acute shortage of previously owned homes available for sale.
A report from the Commerce Department on Friday showed new single-family home sales surged 20.7% to a seasonally adjusted annual rate of 1.021 million units last month, the highest since August 2006.
The sales pace blew past economists' expectations for 886,000 units.
The market for new homes is benefiting from the dearth of previously owned home.
"Demand is causing new homes to be bought virtually as soon as they hit the market," said from Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
The data helped to lift stocks on Wall Street.
The dollar fell against a basket of currencies.
U.S. Treasury prices were lower.
TIGHT INVENTORY
The pandemic is driving demand for bigger and more expensive accommodations as millions of Americans continued to work from home and attend classes remotely.
Homebuilders, however, are also grappling with shortages of land and workers.
New home sales are drawn from a sample of houses selected from building permits.
Sales soared 66.8% year-on-year in March.
Sales surged in the South, Midwest and Northeast, but fell in the West.
They were concentrated in the $200,000-$399,999 price range.
Sales below the $200,000 price bracket, the sought-after segment of the market, accounted for only 3% of transactions last month.
The median new house price rose 0.8% from a year earlier to $330,800 in March.
The National Association of Realtors reported on Thursday that sales of previously owned homes declined for a second straight month in March, with prices hitting an all-time high as supply remained near record lows.
There were 307,000 new homes on the market last month, unchanged from February.
At March's sales pace it would take 3.6 months to clear the supply, down from 4.4 months in February.
"Inventories remain tight and while that should be a positive for home building activity, a lack of availability will likely remain a headwind for sales in the near term," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
About 74% of homes sold last month were either under construction or yet to be built.
https://www.reuters.com/business/us-man ... 021-04-23/
"U.S. manufacturing, new homes sales underscore booming economy"
Lucia Mutikani
April 23, 2021
U.S. factory activity powered ahead in early April, though manufacturers increasingly struggled to source raw materials and other inputs as a reopening economy leads to a boom in domestic demand, which could slow momentum in the months ahead.
The flow of strong economic data continued with another report on Friday showing new home sales racing to a more than 14-1/2-year high in March.
The economy is being boosted by the White House's massive $1.9 trillion COVID-19 pandemic rescue package and increased vaccinations against the virus.
Retail sales jumped to a record high in March and hiring accelerated, cementing expectations for robust growth in the first quarter and setting up the economy for what could be its best performance in nearly four decades.
Data firm IHS Markit said its flash U.S. manufacturing PMI increased to 60.6 in the first half of this month.
That was the highest reading since the series started in May 2007 and followed 59.1 in March.
Economists polled by Reuters had forecast the index rising to 60.5 in early April.
A reading above 50 indicates growth in manufacturing, which accounts for 11.9% of the U.S. economy.
"The U.S. economy is enjoying a strong start to the second quarter, firing on all cylinders as loosening virus restrictions, an impressive vaccine roll-out, a brighter outlook and stimulus measures all helped boost demand," said Chris Williamson, chief business economist at IHS Markit.
More than half of American adults have had at least one vaccine dose, according to the U.S. Centers for Disease Control and Prevention (CDC).
A third of U.S. adults are fully vaccinated.
That, together with the fiscal stimulus, has allowed for broader economic re-engagement.
But the strong demand is pushing against supply constraints.
The pandemic has disrupted labor at factories and their suppliers, causing shortages that are boosting prices of materials and other inputs.
The IHS Markit survey’s measure of prices paid by manufacturers jumped to the highest level since July 2008.
It attributed the higher input prices to “severe supplier shortages and marked rises in transportation fees.”
The continued rise in input costs is one of many factors expected to drive inflation above the Federal Reserve's 2% inflation target this year.
Fed Chair Jerome Powell has expressed confidence that the supply chains will adapt and become more efficient, and prevent prices from remaining higher for a sustained period.
According to IHS Market supply shortages were causing backlogs of uncompleted work "of a magnitude not surpassed for over seven years."
The raw material squeeze is most evident in the automobile industry, where a global semiconductor shortage has forced production cuts at motor vehicle assembly plants.
Supply challenges have also spilled over to the housing market, where builders are struggling with record lumber prices, threatening to worsen an already acute shortage of previously owned homes available for sale.
A report from the Commerce Department on Friday showed new single-family home sales surged 20.7% to a seasonally adjusted annual rate of 1.021 million units last month, the highest since August 2006.
The sales pace blew past economists' expectations for 886,000 units.
The market for new homes is benefiting from the dearth of previously owned home.
"Demand is causing new homes to be bought virtually as soon as they hit the market," said from Robert Frick, corporate economist at Navy Federal Credit Union in Vienna, Virginia.
The data helped to lift stocks on Wall Street.
The dollar fell against a basket of currencies.
U.S. Treasury prices were lower.
TIGHT INVENTORY
The pandemic is driving demand for bigger and more expensive accommodations as millions of Americans continued to work from home and attend classes remotely.
Homebuilders, however, are also grappling with shortages of land and workers.
New home sales are drawn from a sample of houses selected from building permits.
Sales soared 66.8% year-on-year in March.
Sales surged in the South, Midwest and Northeast, but fell in the West.
They were concentrated in the $200,000-$399,999 price range.
Sales below the $200,000 price bracket, the sought-after segment of the market, accounted for only 3% of transactions last month.
The median new house price rose 0.8% from a year earlier to $330,800 in March.
The National Association of Realtors reported on Thursday that sales of previously owned homes declined for a second straight month in March, with prices hitting an all-time high as supply remained near record lows.
There were 307,000 new homes on the market last month, unchanged from February.
At March's sales pace it would take 3.6 months to clear the supply, down from 4.4 months in February.
"Inventories remain tight and while that should be a positive for home building activity, a lack of availability will likely remain a headwind for sales in the near term," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
About 74% of homes sold last month were either under construction or yet to be built.
https://www.reuters.com/business/us-man ... 021-04-23/