CNBC
"February home prices see the biggest gain in 15 years, S&P Case-Shiller says"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED TUE, APR 27 2021
KEY POINTS
* Home prices nationally in February rose 12% year over year, up from 11.2% in January, according to the S&P CoreLogic Case-Shiller home price index.
* The 10-city composite rose 11.7% annually, up from 10.9% in January.
* The 20-city composite gained 11.9%, up from 11.1% in the previous month.
Home price gains continue to outpace expectations, as tight supply and strong demand lead to bidding wars.
Nationally, prices in February rose 12% year over year, up from 11.2% in January, according to the S&P CoreLogic Case-Shiller home price index.
The 10-city composite rose 11.7% annually, up from 10.9% in January.
The 20-city composite gained 11.9%, up from 11.1% in the previous month.
All the gains were in the double digits, except Chicago and Las Vegas.
“The National Composite’s 12% gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance,” said Craig Lazzara, managing director and global head of index investment strategy at S&P DJI.
“February’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 cities with the largest gains continue to be Phoenix, San Diego and Seattle.
Prices in Phoenix gained 17.4% year over year, followed by San Diego with a 17% increase and Seattle with a 15.4% increase.
Nineteen of the 20 cities reported stronger price gains in the year ended February 2021 versus the year ended January.
Prices rose decisively despite the fact that mortgage rates also moved sharply higher during the month.
The average rate on the popular 30-year fixed mortgage started February at 2.79% and ended the month at 3.27%, according to Mortgage News Daily.
Strong demand and record-low supply are pushing prices higher.
More than half of the homes that went under contract during the month experienced bidding wars, according to Redfin.
Homes are also now selling in about half the time they did just a year ago, according to the National Association of Realtors.
Even as vaccines are distributed more widely and Americans start to emerge back into the economy, the desire for larger living spaces with more outdoor amenities appears not to be waning.
“This demand may represent buyers who accelerated purchases that would have happened anyway over the next several years,” said Lazzara.
“Alternatively, there may have been a secular change in preferences, leading to a permanent shift in the demand curve for housing."
"Future data will be required to analyze this question.”
https://www.cnbc.com/2021/04/27/februar ... -says.html
THE HOUSING MARKET
Re: THE HOUSING MARKET
CNBC
"Soaring lumber prices add $36,000 to the cost of a new home, and a fierce land grab is only making it worse"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED FRI, APR 30 2021
KEY POINTS
* The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the NAHB.
* “We have seen, over the last four or five months, what I have never seen in my career before, is lumber to move to the level it has,” said Sheryl Palmer, CEO of Taylor Morrison Home.
* New lot supply is down 20% from a year ago, according to Zonda.
As the housing market gets leaner, potential buyers are turning in record numbers to new construction, but several factors are making those homes pricier than ever before.
First is a major shift in the market’s composition due to the record shortage of existing homes available.
About 1 in 4 homes for sale are now newly built, the highest share ever.
Historically new homes make up about 1 in 10, but fierce buyer competition is behind that shift.
Prices for new and existing homes are at record highs.
But it is not just competition fueling prices for new homes.
The cost of what goes into the home is adding to it as material and land prices surge.
Lumber prices seem to set a new record almost daily, now up 67% this year and up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm.
And lumber doesn’t just go into framing a house.
Those added costs hit cabinets, doors, windows and flooring.
Lumber prices are skyrocketing for various reasons beyond just high demand from homebuilders and remodelers.
Lumber tariffs had prices already rising a year ago, but then when the pandemic hit, production shut down.
The expectation was that housing demand would dry up for a long time.
But instead, after a brief pause, it came roaring back.
Homebuilders were caught off guard, as were lumber producers.
“Clearly, increasing the cost of imports via tariffs does not help the situation,” said Robert Dietz, chief economist for the National Association of Home Builders.
“We need to do everything that we can to increase domestic supply, including producing more domestic lumber, as well as resolving the trade dispute."
"It is matter of housing affordability.”
The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the NAHB.
Some builders have said they are slowing production in the face of exorbitant costs, but single-family housing starts were up 41% in March year over year, according to the U.S. Census.
Builders are clearly trying to ramp up production as fast as they can to meet soaring demand.
“We just have no supply in either the new home or resale market today,” Sheryl Palmer, CEO of homebuilder Taylor Morrison, said in an interview on CNBC’s “Worldwide Exchange.”
Palmer said she has seen demand rise across all geographies and all segments of the market, particularly first-time buyers and 55+ buyers.
Builder costs, however, are out of control, she said.
“We have seen, over the last four or five months, what I have never seen in my career before, is lumber to move to the level it has,” said Palmer.
“We are very anxious to see full capacity back domestically."
"I think if we can get the full supply on, we can get lumber to level out a bit.”
But it’s not just lumber.
Prices of gypsum, which is drywall, are up nearly 7% from a year ago.
Steel mill product prices are at a record high, up nearly 18% in March year over year.
It’s used for beams, sheet metal products and wiring.
The price of copper also set a record high this month and is 27% year to date.
And then there is land.
The price per single lot is up 11% this year compared last year, because demand is so high and supply is low.
New lot supply is down 20% from a year ago, according to Zonda, a real estate data and advisory firm.
The inventory is tightest in San Diego, Baltimore and San Francisco.
Nashville is also now seeing one of the biggest drops in supply.
Lot supply in 90% of the top markets tracked by Zonda is considered significantly undersupplied.
“There’s a literal land grab going on as builders are scooping up lots to better match housing supply with demand,” said Ali Wolf, chief economist with Zonda.
“The lot supply shortage is real, and it is causing prices to rise and builders to move further into the suburbs.”
Wolf adds that the new housing market is underperforming its full potential, and will continue to as long as the lot shortage persists.
Add higher commodity prices to that equation and the new home market will continue to struggle at a time when it should be reaping huge rewards from hungry buyers.
https://www.cnbc.com/2021/04/30/soaring ... -home.html
"Soaring lumber prices add $36,000 to the cost of a new home, and a fierce land grab is only making it worse"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED FRI, APR 30 2021
KEY POINTS
* The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the NAHB.
* “We have seen, over the last four or five months, what I have never seen in my career before, is lumber to move to the level it has,” said Sheryl Palmer, CEO of Taylor Morrison Home.
* New lot supply is down 20% from a year ago, according to Zonda.
As the housing market gets leaner, potential buyers are turning in record numbers to new construction, but several factors are making those homes pricier than ever before.
First is a major shift in the market’s composition due to the record shortage of existing homes available.
About 1 in 4 homes for sale are now newly built, the highest share ever.
Historically new homes make up about 1 in 10, but fierce buyer competition is behind that shift.
Prices for new and existing homes are at record highs.
But it is not just competition fueling prices for new homes.
The cost of what goes into the home is adding to it as material and land prices surge.
Lumber prices seem to set a new record almost daily, now up 67% this year and up 340% from a year ago, according to Random Lengths, a wood products industry tracking firm.
And lumber doesn’t just go into framing a house.
Those added costs hit cabinets, doors, windows and flooring.
Lumber prices are skyrocketing for various reasons beyond just high demand from homebuilders and remodelers.
Lumber tariffs had prices already rising a year ago, but then when the pandemic hit, production shut down.
The expectation was that housing demand would dry up for a long time.
But instead, after a brief pause, it came roaring back.
Homebuilders were caught off guard, as were lumber producers.
“Clearly, increasing the cost of imports via tariffs does not help the situation,” said Robert Dietz, chief economist for the National Association of Home Builders.
“We need to do everything that we can to increase domestic supply, including producing more domestic lumber, as well as resolving the trade dispute."
"It is matter of housing affordability.”
The surge in lumber prices in the past year has added $35,872 to the price of an average new single-family home and $12,966 to the market value of an average new multifamily home, according to the NAHB.
Some builders have said they are slowing production in the face of exorbitant costs, but single-family housing starts were up 41% in March year over year, according to the U.S. Census.
Builders are clearly trying to ramp up production as fast as they can to meet soaring demand.
“We just have no supply in either the new home or resale market today,” Sheryl Palmer, CEO of homebuilder Taylor Morrison, said in an interview on CNBC’s “Worldwide Exchange.”
Palmer said she has seen demand rise across all geographies and all segments of the market, particularly first-time buyers and 55+ buyers.
Builder costs, however, are out of control, she said.
“We have seen, over the last four or five months, what I have never seen in my career before, is lumber to move to the level it has,” said Palmer.
“We are very anxious to see full capacity back domestically."
"I think if we can get the full supply on, we can get lumber to level out a bit.”
But it’s not just lumber.
Prices of gypsum, which is drywall, are up nearly 7% from a year ago.
Steel mill product prices are at a record high, up nearly 18% in March year over year.
It’s used for beams, sheet metal products and wiring.
The price of copper also set a record high this month and is 27% year to date.
And then there is land.
The price per single lot is up 11% this year compared last year, because demand is so high and supply is low.
New lot supply is down 20% from a year ago, according to Zonda, a real estate data and advisory firm.
The inventory is tightest in San Diego, Baltimore and San Francisco.
Nashville is also now seeing one of the biggest drops in supply.
Lot supply in 90% of the top markets tracked by Zonda is considered significantly undersupplied.
“There’s a literal land grab going on as builders are scooping up lots to better match housing supply with demand,” said Ali Wolf, chief economist with Zonda.
“The lot supply shortage is real, and it is causing prices to rise and builders to move further into the suburbs.”
Wolf adds that the new housing market is underperforming its full potential, and will continue to as long as the lot shortage persists.
Add higher commodity prices to that equation and the new home market will continue to struggle at a time when it should be reaping huge rewards from hungry buyers.
https://www.cnbc.com/2021/04/30/soaring ... -home.html
Re: THE HOUSING MARKET
CNBC
"Home construction sees biggest drop since pandemic hit. Here’s why"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED TUE, MAY 18 2021
KEY POINTS
* Single-family housing starts dropped more than 13% in April compared with March, according to the U.S. Census.
* Prices for new and existing homes are at record levels, and the increases are accelerating at the fastest clip in over 15 years.
* Roughly 15% of builders said they are putting down concrete foundations and then holding off on framing the house.
Despite a historic shortage of homes for sale, homebuilders are actually slowing production, handcuffed by skyrocketing commodity prices and shortages of land and skilled labor.
Single-family housing starts dropped more than 13% in April compared with March, the U.S. Census reported Tuesday.
That’s the sharpest decrease since last April, when the pandemic shut down the economy.
“I have to blame the difficulty in procuring lumber and other products, along with labor issues for the miss, in addition to likely cancellations due to skyrocketing costs for single family starts,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Prices new and existing homes are at record levels, and the increases are accelerating at the fastest clip in over 15 years.
Nearly half of all builders say they are adding escalation clauses to their sale prices because of rising material costs, according to a recent survey from the National Association of Home Builders.
“Escalation clauses specify that if building materials increase, by a certain percentage for example, the customer would be responsible for paying the higher cost."
"Including such a clause allows all parties to be on notice that the contract costs could change if materials prices change due to supply constraints outside the builder’s control,” according to a recent NAHB post.
In a monthly sentiment survey, they also noted that builders said they were slowing production in order to deal with higher costs for lumber, steel, gypsum and copper, some of which have hit record highs this year.
A broad mix of residential construction materials is up in aggregate 12.4% over the previous 12 months, according to the producer price index.
The NAHB estimates that the increase in lumber alone has added $36,000 to the cost of building the average single-family home.
The industry is also dealing with a shortage of labor.
Construction employment stalled in April and fell below it’s pre-pandemic peak, according to the Bureau of Labor Statistics.
“Contractors are experiencing unprecedented intensity and range of cost increases, supply-chain disruptions, and worker shortages that have kept firms from increasing their workforces,” said Ken Simonson, chief economist with Associated General Contractors of America, an industry trade group.
“These challenges will make it difficult for contractors to rebound as the pandemic appears to wane.”
Roughly 15% of builders said they are putting down concrete foundations and then holding off on framing the house.
This counts officially as a “start” according to the Census monthly figures, but it doesn’t create a house.
Supply-chain issues are also filtering down into all the things that go into a home.
“Builders are also reporting difficulty obtaining other inputs like appliances,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association.
“These supply-chain constraints are holding back a housing market that should otherwise be picking up speed, given the strong demand for buying fueled by an improving job market and low mortgage rates.”
https://www.cnbc.com/2021/05/18/home-co ... s-why.html
"Home construction sees biggest drop since pandemic hit. Here’s why"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED TUE, MAY 18 2021
KEY POINTS
* Single-family housing starts dropped more than 13% in April compared with March, according to the U.S. Census.
* Prices for new and existing homes are at record levels, and the increases are accelerating at the fastest clip in over 15 years.
* Roughly 15% of builders said they are putting down concrete foundations and then holding off on framing the house.
Despite a historic shortage of homes for sale, homebuilders are actually slowing production, handcuffed by skyrocketing commodity prices and shortages of land and skilled labor.
Single-family housing starts dropped more than 13% in April compared with March, the U.S. Census reported Tuesday.
That’s the sharpest decrease since last April, when the pandemic shut down the economy.
“I have to blame the difficulty in procuring lumber and other products, along with labor issues for the miss, in addition to likely cancellations due to skyrocketing costs for single family starts,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.
Prices new and existing homes are at record levels, and the increases are accelerating at the fastest clip in over 15 years.
Nearly half of all builders say they are adding escalation clauses to their sale prices because of rising material costs, according to a recent survey from the National Association of Home Builders.
“Escalation clauses specify that if building materials increase, by a certain percentage for example, the customer would be responsible for paying the higher cost."
"Including such a clause allows all parties to be on notice that the contract costs could change if materials prices change due to supply constraints outside the builder’s control,” according to a recent NAHB post.
In a monthly sentiment survey, they also noted that builders said they were slowing production in order to deal with higher costs for lumber, steel, gypsum and copper, some of which have hit record highs this year.
A broad mix of residential construction materials is up in aggregate 12.4% over the previous 12 months, according to the producer price index.
The NAHB estimates that the increase in lumber alone has added $36,000 to the cost of building the average single-family home.
The industry is also dealing with a shortage of labor.
Construction employment stalled in April and fell below it’s pre-pandemic peak, according to the Bureau of Labor Statistics.
“Contractors are experiencing unprecedented intensity and range of cost increases, supply-chain disruptions, and worker shortages that have kept firms from increasing their workforces,” said Ken Simonson, chief economist with Associated General Contractors of America, an industry trade group.
“These challenges will make it difficult for contractors to rebound as the pandemic appears to wane.”
Roughly 15% of builders said they are putting down concrete foundations and then holding off on framing the house.
This counts officially as a “start” according to the Census monthly figures, but it doesn’t create a house.
Supply-chain issues are also filtering down into all the things that go into a home.
“Builders are also reporting difficulty obtaining other inputs like appliances,” said Mike Fratantoni, chief economist for the Mortgage Bankers Association.
“These supply-chain constraints are holding back a housing market that should otherwise be picking up speed, given the strong demand for buying fueled by an improving job market and low mortgage rates.”
https://www.cnbc.com/2021/05/18/home-co ... s-why.html
Re: THE HOUSING MARKET
REUTERS
"Surging lumber prices weigh on U.S. homebuilding"
Lucia Mutikani
May 18, 2021
U.S. homebuilding fell more than expected in April, likely pulled down by soaring prices for lumber and other materials, but construction remains supported by an acute shortage of previously owned homes on the market.
The plunge in homebuilding reported by the Commerce Department on Tuesday was concentrated in the single-family housing market segment.
The number of houses authorized for construction but not yet started increased to the highest level since 1999, suggesting hesitancy on the part of builders.
"Builders are delaying starting new construction because of the marked increase in costs for lumber and other inputs," said Mike Fratantoni, chief economist at the Mortgage Bankers Association in Washington.
"These supply-chain constraints are holding back a housing market that should otherwise be picking up speed, given the strong demand for buying fueled by an improving job market and low mortgage rates."
Housing starts tumbled 9.5% to a seasonally adjusted annual rate of 1.569 million units last month.
Data for March was revised lower to a rate of 1.733 million units, still the highest level since June 2006, from the previously reported 1.739 million units.
Economists polled by Reuters had forecast starts would fall to a rate of 1.710 million units in April.
Starts surged 67.3% on a year-on-year basis in April.
Groundbreaking activity dropped in the Midwest and the densely populated South, but rose in the Northeast and West.
Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has forced millions of Americans to work from home and take classes remotely, has fueled a housing market boom.
But the virus has disrupted labor supply at saw mills and ports, leading to shortages of lumber and other raw materials, boosting prices and threatening to sideline first-time homebuyers from the market.
U.S. stocks were trading mixed and the dollar slipped against a basket of currencies.
Prices of longer-dated U.S. Treasuries fell.
LOW INVENTORY
The inventory of previously owned homes is near record lows.
Tariffs on steel imports are also adding to building costs.
Lumber prices surged 89.7% on a year-on-year basis in April, according to the latest producer price data.
A survey from the National Association of Home Builders on Monday showed confidence among single-family homebuilders holding steady in May.
The NAHB noted that "some builders are slowing sales to manage their own supply chains."
According to an Institute for Supply Management survey published early this month, businesses in the construction industry reported challenges finding and retaining skilled and unskilled workers, with some companies saying "we are not accepting all the work that we could if we had the labor."
Permits for future homebuilding rose 0.3% to a rate of 1.760 million units in April.
They soared 60.9% compared to April 2020, and are running ahead of starts, which suggests a rebound in homebuilding in the months ahead.
Single-family homebuilding, the largest share of the housing market, dropped 13.4% to a rate of 1.087 million units in April.
It retreated further below the more than 14-year high scaled in December, a sign that builders could be holding back because of the more expensive materials and lack of labor.
Building permits for single-family homes fell 3.8% to a rate of 1.149 million units.
The number of housing units authorized to be built but not started surged 5.0% to a rate of 232,000 at the end of April, the highest since the government started tracking the series in January 1999.
"It is currently somewhat uncertain when exactly supply issues could be resolved," said Isfar Munir, an economist at Citigroup in New York.
"Eventually, however, we expect that backlogs of demand could keep housing activity supported into the end of the year."
The housing market has been the star performer in the economy's recovery from the COVID-19 recession, which started in February 2020.
Residential construction investment has enjoyed double-digit growth since the third quarter of last year.
Most economists expect housing will have a neutral impact on gross domestic product growth in the second quarter.
Starts for the volatile multi-family segment rose 0.8% to a pace of 482,000 units in April.
Building permits for multi-family housing projects accelerated 8.9% to a rate of 611,000 units.
With more than a third of the American population vaccinated against COVID-19 and restrictions on services businesses being lifted, people are flocking back to cities.
Housing completions fell 4.4% to a rate of 1.449 million units last month.
Single-family home completions edged up 0.1% to a rate of 1.045 million units.
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 increased 0.6% to a rate of 1.312 million units last month.
https://www.reuters.com/business/us-hou ... 021-05-18/
"Surging lumber prices weigh on U.S. homebuilding"
Lucia Mutikani
May 18, 2021
U.S. homebuilding fell more than expected in April, likely pulled down by soaring prices for lumber and other materials, but construction remains supported by an acute shortage of previously owned homes on the market.
The plunge in homebuilding reported by the Commerce Department on Tuesday was concentrated in the single-family housing market segment.
The number of houses authorized for construction but not yet started increased to the highest level since 1999, suggesting hesitancy on the part of builders.
"Builders are delaying starting new construction because of the marked increase in costs for lumber and other inputs," said Mike Fratantoni, chief economist at the Mortgage Bankers Association in Washington.
"These supply-chain constraints are holding back a housing market that should otherwise be picking up speed, given the strong demand for buying fueled by an improving job market and low mortgage rates."
Housing starts tumbled 9.5% to a seasonally adjusted annual rate of 1.569 million units last month.
Data for March was revised lower to a rate of 1.733 million units, still the highest level since June 2006, from the previously reported 1.739 million units.
Economists polled by Reuters had forecast starts would fall to a rate of 1.710 million units in April.
Starts surged 67.3% on a year-on-year basis in April.
Groundbreaking activity dropped in the Midwest and the densely populated South, but rose in the Northeast and West.
Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has forced millions of Americans to work from home and take classes remotely, has fueled a housing market boom.
But the virus has disrupted labor supply at saw mills and ports, leading to shortages of lumber and other raw materials, boosting prices and threatening to sideline first-time homebuyers from the market.
U.S. stocks were trading mixed and the dollar slipped against a basket of currencies.
Prices of longer-dated U.S. Treasuries fell.
LOW INVENTORY
The inventory of previously owned homes is near record lows.
Tariffs on steel imports are also adding to building costs.
Lumber prices surged 89.7% on a year-on-year basis in April, according to the latest producer price data.
A survey from the National Association of Home Builders on Monday showed confidence among single-family homebuilders holding steady in May.
The NAHB noted that "some builders are slowing sales to manage their own supply chains."
According to an Institute for Supply Management survey published early this month, businesses in the construction industry reported challenges finding and retaining skilled and unskilled workers, with some companies saying "we are not accepting all the work that we could if we had the labor."
Permits for future homebuilding rose 0.3% to a rate of 1.760 million units in April.
They soared 60.9% compared to April 2020, and are running ahead of starts, which suggests a rebound in homebuilding in the months ahead.
Single-family homebuilding, the largest share of the housing market, dropped 13.4% to a rate of 1.087 million units in April.
It retreated further below the more than 14-year high scaled in December, a sign that builders could be holding back because of the more expensive materials and lack of labor.
Building permits for single-family homes fell 3.8% to a rate of 1.149 million units.
The number of housing units authorized to be built but not started surged 5.0% to a rate of 232,000 at the end of April, the highest since the government started tracking the series in January 1999.
"It is currently somewhat uncertain when exactly supply issues could be resolved," said Isfar Munir, an economist at Citigroup in New York.
"Eventually, however, we expect that backlogs of demand could keep housing activity supported into the end of the year."
The housing market has been the star performer in the economy's recovery from the COVID-19 recession, which started in February 2020.
Residential construction investment has enjoyed double-digit growth since the third quarter of last year.
Most economists expect housing will have a neutral impact on gross domestic product growth in the second quarter.
Starts for the volatile multi-family segment rose 0.8% to a pace of 482,000 units in April.
Building permits for multi-family housing projects accelerated 8.9% to a rate of 611,000 units.
With more than a third of the American population vaccinated against COVID-19 and restrictions on services businesses being lifted, people are flocking back to cities.
Housing completions fell 4.4% to a rate of 1.449 million units last month.
Single-family home completions edged up 0.1% to a rate of 1.045 million units.
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 increased 0.6% to a rate of 1.312 million units last month.
https://www.reuters.com/business/us-hou ... 021-05-18/
Re: THE HOUSING MARKET
CNBC
"April existing home sales drop, marking three straight months of declines"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED FRI, MAY 21 2021
KEY POINTS
* Sales of existing homes dropped 2.7% in April from March
* The supply of homes for sale at the end of April was down 20%.
* The median price of an existing home sold in April was $341,600, an increase of 19.1% from April 2020.
Sales of existing homes dropped 2.7% in April from March to a seasonally adjusted annualized rate of 5.85 million units, according to the National Association of Realtors.
It was the third straight month of declines, the group said.
Sales were 33.9% higher than April 2020, but that comparison is an anomaly because the housing market and economy shut down at the start of the pandemic.
Housing then rebounded strongly last summer.
Sales were still 11% stronger than April 2019.
“I would say it is hot, that is the one word description even with the sales decline,” said Lawrence Yun, chief economist for the Realtors.
For every listing there are 5.1 offers.
Half of the homes are being sold above list price.”
The supply of homes for sale at the end of April was down 20%.
There were 1.16 million homes for sale, representing a 2.4-month supply at the current sales pace.
High demand and rock-bottom supply continued to push prices higher.
The median price of an existing home sold in April was $341,600, an increase of 19.1% from April 2020.
That is both the highest median price on record and the largest annual increase on record.
Much of that large increase in the median price is due to the mix of homes that are selling.
There is far more activity on the higher end of the market, where supply is more plentiful, and very little activity on the low end, where the shortage is most severe.
As an example, sales of homes priced between $100,000 and $250,000 were unchanged from a year earlier.
Sales of homes priced between $750,000 and $1 million rose 146%% from a year earlier, and sales of homes over $1 million jumped 212%.
Competition is also incredibly intense, with homes selling in just 17 days, the fastest the Realtors have ever recorded.
The all-cash share of sales rose to 25% from 13% one year ago.
Investors made up 17% of all transactions.
First-time buyers made up 31% of purchases, a slight decline from a month earlier.
Mortgage rates in February and March, when these deals were signed, rose quickly and dramatically.
The average rate on the 30-year fixed started February around 2.80% and ended March around 3.42%, according to Mortgage News Daily.
That took purchasing power away from buyers, who were already contending with high prices.
Sales of newly built homes, which are measured by signed contracts, not closings, rose a strong 21% in March from February.
Builders are benefitting from the shortage of existing homes for sale, but prices for new homes are also rising sharply.
Builders have not been increasing production enough to meet all the demand, as they are hampered by rising costs for land and material and an increasingly difficult labor shortage.
The hope now is that with more vaccinations, and people feeling better about social interaction, more potential sellers will list their homes.
“Rising seller sentiment could mean some relief is ahead with perhaps even a greater-than-normal share of homeowners stepping into the market later this year,” said Danielle Hale, chief economist for realtor.com.
“While it’s not enough to end the shortage of homes for sale, this wave of sellers will make a dent, giving homebuyers more options to choose from.”
https://www.cnbc.com/2021/05/21/april-e ... lines.html
"April existing home sales drop, marking three straight months of declines"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED FRI, MAY 21 2021
KEY POINTS
* Sales of existing homes dropped 2.7% in April from March
* The supply of homes for sale at the end of April was down 20%.
* The median price of an existing home sold in April was $341,600, an increase of 19.1% from April 2020.
Sales of existing homes dropped 2.7% in April from March to a seasonally adjusted annualized rate of 5.85 million units, according to the National Association of Realtors.
It was the third straight month of declines, the group said.
Sales were 33.9% higher than April 2020, but that comparison is an anomaly because the housing market and economy shut down at the start of the pandemic.
Housing then rebounded strongly last summer.
Sales were still 11% stronger than April 2019.
“I would say it is hot, that is the one word description even with the sales decline,” said Lawrence Yun, chief economist for the Realtors.
For every listing there are 5.1 offers.
Half of the homes are being sold above list price.”
The supply of homes for sale at the end of April was down 20%.
There were 1.16 million homes for sale, representing a 2.4-month supply at the current sales pace.
High demand and rock-bottom supply continued to push prices higher.
The median price of an existing home sold in April was $341,600, an increase of 19.1% from April 2020.
That is both the highest median price on record and the largest annual increase on record.
Much of that large increase in the median price is due to the mix of homes that are selling.
There is far more activity on the higher end of the market, where supply is more plentiful, and very little activity on the low end, where the shortage is most severe.
As an example, sales of homes priced between $100,000 and $250,000 were unchanged from a year earlier.
Sales of homes priced between $750,000 and $1 million rose 146%% from a year earlier, and sales of homes over $1 million jumped 212%.
Competition is also incredibly intense, with homes selling in just 17 days, the fastest the Realtors have ever recorded.
The all-cash share of sales rose to 25% from 13% one year ago.
Investors made up 17% of all transactions.
First-time buyers made up 31% of purchases, a slight decline from a month earlier.
Mortgage rates in February and March, when these deals were signed, rose quickly and dramatically.
The average rate on the 30-year fixed started February around 2.80% and ended March around 3.42%, according to Mortgage News Daily.
That took purchasing power away from buyers, who were already contending with high prices.
Sales of newly built homes, which are measured by signed contracts, not closings, rose a strong 21% in March from February.
Builders are benefitting from the shortage of existing homes for sale, but prices for new homes are also rising sharply.
Builders have not been increasing production enough to meet all the demand, as they are hampered by rising costs for land and material and an increasingly difficult labor shortage.
The hope now is that with more vaccinations, and people feeling better about social interaction, more potential sellers will list their homes.
“Rising seller sentiment could mean some relief is ahead with perhaps even a greater-than-normal share of homeowners stepping into the market later this year,” said Danielle Hale, chief economist for realtor.com.
“While it’s not enough to end the shortage of homes for sale, this wave of sellers will make a dent, giving homebuyers more options to choose from.”
https://www.cnbc.com/2021/05/21/april-e ... lines.html
Re: THE HOUSING MARKET
REUTERS
"U.S. existing home sales extend decline; house prices race to record high"
By Lucia Mutikani
MAY 21, 2021
WASHINGTON (Reuters) - U.S. home sales fell for a third straight month in April as an acute shortage of properties drove prices to a record high.
Existing home sales dropped 2.7% to a seasonally adjusted annual rate of 5.85 million units last month, the National Association of Realtors said on Friday.
Sales fell in the Northeast, West and the densely populated South, but rose in the Midwest.
Economists polled by Reuters had forecast sales rebounding 2.0% to a rate of 6.09 million units in April.
Home resales, which account for the bulk of U.S. home sales, surged 33.9% on a year-on-year basis.
The annual increase was, however, distorted by the plunge in sales in April 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.
The housing market is being driven by demand for bigger and more expensive accommodations after the COVID-19 pandemic forced millions of Americans to work from home and take classes remotely.
But the virus has disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials.
That is limiting builders’ ability to ramp up construction of new homes, keeping in place an inventory shortage that is boosting prices and threatening to sideline first-time homebuyers from the market.
The government reported this week that homebuilding tumbled in April.
There is cautious optimism that the reopening of the economy, facilitated by the vaccination of more than a third of the population and massive fiscal stimulus, could encourage more homeowners to put houses on the market.
Some elderly Americans likely delayed downsizing because of the pandemic.
The median existing house price shot up 19.1% from a year ago to $341,600 in April.
Economists do not believe another housing bubble is developing, noting that the surge is being mostly driven by a mismatch between supply and demand, rather poor lending practices, which triggered the 2008 global financial crisis.
There were 1.16 million previously owned homes on the market in April, down 20.5% from a year ago.
At April’s sales pace, it would take 2.4 months to exhaust the current inventory, down from 2.4 months a year ago.
A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
First-time buyers accounted for 31% of sales in April.
Reporting by Lucia Mutikani; Editing by Dan Burns
https://www.reuters.com/article/us-usa- ... SKCN2D21RV
"U.S. existing home sales extend decline; house prices race to record high"
By Lucia Mutikani
MAY 21, 2021
WASHINGTON (Reuters) - U.S. home sales fell for a third straight month in April as an acute shortage of properties drove prices to a record high.
Existing home sales dropped 2.7% to a seasonally adjusted annual rate of 5.85 million units last month, the National Association of Realtors said on Friday.
Sales fell in the Northeast, West and the densely populated South, but rose in the Midwest.
Economists polled by Reuters had forecast sales rebounding 2.0% to a rate of 6.09 million units in April.
Home resales, which account for the bulk of U.S. home sales, surged 33.9% on a year-on-year basis.
The annual increase was, however, distorted by the plunge in sales in April 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.
The housing market is being driven by demand for bigger and more expensive accommodations after the COVID-19 pandemic forced millions of Americans to work from home and take classes remotely.
But the virus has disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials.
That is limiting builders’ ability to ramp up construction of new homes, keeping in place an inventory shortage that is boosting prices and threatening to sideline first-time homebuyers from the market.
The government reported this week that homebuilding tumbled in April.
There is cautious optimism that the reopening of the economy, facilitated by the vaccination of more than a third of the population and massive fiscal stimulus, could encourage more homeowners to put houses on the market.
Some elderly Americans likely delayed downsizing because of the pandemic.
The median existing house price shot up 19.1% from a year ago to $341,600 in April.
Economists do not believe another housing bubble is developing, noting that the surge is being mostly driven by a mismatch between supply and demand, rather poor lending practices, which triggered the 2008 global financial crisis.
There were 1.16 million previously owned homes on the market in April, down 20.5% from a year ago.
At April’s sales pace, it would take 2.4 months to exhaust the current inventory, down from 2.4 months a year ago.
A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
First-time buyers accounted for 31% of sales in April.
Reporting by Lucia Mutikani; Editing by Dan Burns
https://www.reuters.com/article/us-usa- ... SKCN2D21RV
Re: THE HOUSING MARKET
REUTERS
"Fed's Barkin: not yet seeing excess leverage in housing market"
Reuters
May 25, 2021
Federal Reserve Bank of Richmond President Thomas Barkin on Tuesday said surging home prices are being driven by a jump in demand and constrained supply but not by excess leverage, reducing the potential risk to the broad financial system should prices fall.
"I don't look at plummeting house prices as a first order risk, but if it were to happen, it only becomes a financial stability risk if you've got too much leverage against it," Barkin told the Wilmington Chamber of Commerce in a virtual event.
"That's what I watch is the leverage in the housing market and again, based on what I can tell, I don't see it going to excess levels yet; that of course is something we are going to have to watch as we get into this."
https://www.reuters.com/business/feds-b ... 021-05-25/
"Fed's Barkin: not yet seeing excess leverage in housing market"
Reuters
May 25, 2021
Federal Reserve Bank of Richmond President Thomas Barkin on Tuesday said surging home prices are being driven by a jump in demand and constrained supply but not by excess leverage, reducing the potential risk to the broad financial system should prices fall.
"I don't look at plummeting house prices as a first order risk, but if it were to happen, it only becomes a financial stability risk if you've got too much leverage against it," Barkin told the Wilmington Chamber of Commerce in a virtual event.
"That's what I watch is the leverage in the housing market and again, based on what I can tell, I don't see it going to excess levels yet; that of course is something we are going to have to watch as we get into this."
https://www.reuters.com/business/feds-b ... 021-05-25/
Re: THE HOUSING MARKET
CNBC
"Housing boom may be cooling as weekly mortgage demand drops again"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED WED, JUN 2 2021
KEY POINTS
* The average interest rate for 30-year fixed-rate mortgages decreased to 3.17% from 3.18% last week, but the Mortgage Bankers Association said applications for a mortgage to purchase a home fell 3% and were 2% lower than the same week a year ago.
* “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continues to hold back purchase activity,” said Joel Kan, an MBA economist.
High prices and low supply are finally taking some of the heat out of the housing market.
Even with interest rates falling slightly, mortgage application volume fell 4% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
It fell to the lowest level since February 2020.
Applications for a mortgage to purchase a home fell 3% for the week and were 2% lower than a year ago.
This is the second straight week that purchase demand was lower than a year earlier, even though mortgage rates are still lower.
Pending home sales, which are counted by signed contracts and are therefore an indicator of future closed sales, dropped a wider-than-expected 4.4% in April, according to the National Association of Realtors.
Buyers are clearly starting to hit an affordability wall.
This is especially clear from the government loan demand.
FHA and VA loans offer low or even no down payment options for borrowers with lower incomes and credit scores.
“Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continues to hold back purchase activity,” said Joel Kan, an MBA economist.
“The government purchase index declined to its lowest level in over a year and has now decreased year over year for five straight weeks.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.17% from 3.18%, with points increasing to 0.39 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio loans.
That rate was 20 basis points higher one year ago.
Lower rates did not light a fire under refinance demand.
Those applications decreased 5% from the previous week and were just 6% higher than a year ago.
The refinance share of mortgage activity decreased to 61.3% of total applications from 61.4% the previous week.
“Even though rates have been below 3.20% over the past month, they are still around 20-30 basis points higher than the record lows in late 2020,” Kan said.
The refinance boom during the second half of last year has left fewer and fewer borrowers able to benefit from a refinance now.
Mortgage rates are holding steady to start this holiday-shortened work week, but economic data out later this week could change that.
The all-important monthly employment report for May is coming Friday, and depending on the outcome, rates could swing in either direction.
https://www.cnbc.com/2021/06/02/housing ... again.html
"Housing boom may be cooling as weekly mortgage demand drops again"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED WED, JUN 2 2021
KEY POINTS
* The average interest rate for 30-year fixed-rate mortgages decreased to 3.17% from 3.18% last week, but the Mortgage Bankers Association said applications for a mortgage to purchase a home fell 3% and were 2% lower than the same week a year ago.
* “Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continues to hold back purchase activity,” said Joel Kan, an MBA economist.
High prices and low supply are finally taking some of the heat out of the housing market.
Even with interest rates falling slightly, mortgage application volume fell 4% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
It fell to the lowest level since February 2020.
Applications for a mortgage to purchase a home fell 3% for the week and were 2% lower than a year ago.
This is the second straight week that purchase demand was lower than a year earlier, even though mortgage rates are still lower.
Pending home sales, which are counted by signed contracts and are therefore an indicator of future closed sales, dropped a wider-than-expected 4.4% in April, according to the National Association of Realtors.
Buyers are clearly starting to hit an affordability wall.
This is especially clear from the government loan demand.
FHA and VA loans offer low or even no down payment options for borrowers with lower incomes and credit scores.
“Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continues to hold back purchase activity,” said Joel Kan, an MBA economist.
“The government purchase index declined to its lowest level in over a year and has now decreased year over year for five straight weeks.”
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.17% from 3.18%, with points increasing to 0.39 from 0.35 (including the origination fee) for 80 percent loan-to-value ratio loans.
That rate was 20 basis points higher one year ago.
Lower rates did not light a fire under refinance demand.
Those applications decreased 5% from the previous week and were just 6% higher than a year ago.
The refinance share of mortgage activity decreased to 61.3% of total applications from 61.4% the previous week.
“Even though rates have been below 3.20% over the past month, they are still around 20-30 basis points higher than the record lows in late 2020,” Kan said.
The refinance boom during the second half of last year has left fewer and fewer borrowers able to benefit from a refinance now.
Mortgage rates are holding steady to start this holiday-shortened work week, but economic data out later this week could change that.
The all-important monthly employment report for May is coming Friday, and depending on the outcome, rates could swing in either direction.
https://www.cnbc.com/2021/06/02/housing ... again.html
Re: THE HOUSING MARKET
REUTERS
"U.S. consumers sour on housing market's buying conditions"
Evan Sully
June 7, 2021
A record-low percentage of U.S. consumers believe now is a good time to buy a home, with worries about surging prices and a small supply of houses on the market outweighing improved sentiment about their jobs and income, a survey from home financing giant Fannie Mae showed on Monday.
The percentage of consumers who said it is a good time to buy a home declined in May to 35% from 47%, Fannie Mae said in its monthly survey of the U.S. housing market.
This reading, the lowest since Fannie Mae began the survey about a decade ago, marked the second straight monthly decline and represented a drop of 18 percentage points since March.
In comparison, the percentage of consumers indicating that now is a bad time to purchase a home increased to 56% from 48% last month.
The data is part of Fannie Mae's Home Purchase Sentiment Index (HPSI), which increased by 1.0 point to 80.0 last month and is up 12.5 points from a year earlier.
The index's record high was 93.8 in August 2019.
"The 'good time to buy' component fell further - hitting another all-time survey low – as consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment," Fannie Mae Chief Economist Doug Duncan said in a statement.
The improvement of a U.S. economy that had been battered by the COVID-19 pandemic has left a challenging environment for home buyers.
The Mortgage Bankers Association (MBA) reported last Wednesday that its seasonally adjusted Purchase Index decreased 4% from a week prior to the lowest in more than a year.
https://www.reuters.com/business/us-con ... 021-06-07/
"U.S. consumers sour on housing market's buying conditions"
Evan Sully
June 7, 2021
A record-low percentage of U.S. consumers believe now is a good time to buy a home, with worries about surging prices and a small supply of houses on the market outweighing improved sentiment about their jobs and income, a survey from home financing giant Fannie Mae showed on Monday.
The percentage of consumers who said it is a good time to buy a home declined in May to 35% from 47%, Fannie Mae said in its monthly survey of the U.S. housing market.
This reading, the lowest since Fannie Mae began the survey about a decade ago, marked the second straight monthly decline and represented a drop of 18 percentage points since March.
In comparison, the percentage of consumers indicating that now is a bad time to purchase a home increased to 56% from 48% last month.
The data is part of Fannie Mae's Home Purchase Sentiment Index (HPSI), which increased by 1.0 point to 80.0 last month and is up 12.5 points from a year earlier.
The index's record high was 93.8 in August 2019.
"The 'good time to buy' component fell further - hitting another all-time survey low – as consumers appear to be acutely aware of higher home prices and the low supply of homes, the two reasons cited most frequently for that particular sentiment," Fannie Mae Chief Economist Doug Duncan said in a statement.
The improvement of a U.S. economy that had been battered by the COVID-19 pandemic has left a challenging environment for home buyers.
The Mortgage Bankers Association (MBA) reported last Wednesday that its seasonally adjusted Purchase Index decreased 4% from a week prior to the lowest in more than a year.
https://www.reuters.com/business/us-con ... 021-06-07/
Re: THE HOUSING MARKET
THE CAPE CHARLES MIRROR JUNE 12, 2021 AT 10:36 PM
Paul Plante says:
And speaking of having a crackpot economist in charge of our United States Treasury, and thus, essentially in charge of our lives, which is not a comforting thought at all, unless you are into and an advocate of HOODOO economics, a swirl of smaller crackpot theories rolled up into one major-league crackpot theory employed by Janet “TOODLES” Yellen, Joe Biden’s own personal financial guru, let’s go to a CNBC story entitled “Higher interest rates would be good for the country, Treasury Secretary Yellen says” by Emma Newburger published June 6, 2021, where we have this ignorant codswallop (nonsense, as in “I think that’s a right load of old codswallop”) from “TOODLES” which demonstrates how thin her grasp on the reality most of us who are not rich like her live our lives in, outside of her guarded and gated community where only the rich and privileged can go, to wit:
U.S. Treasury Secretary Janet Yellen said that President Joe Biden’s $4 trillion spending proposal would be positive for the country, even if it leads to a rise in interest rates.
“If we ended up with a slightly higher interest rate environment it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.
“We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade,” she said.
She added that if the packages help at all to “alleviate things then that’s not a bad thing — that’s a good thing.”
end quotes
And that is from her perspective as someone who wants to protect her own net worth and has the political power to do so.
But historically speaking, what might be good for the fed is hardly good for society, since the federal reserve is a giant parasite that feeds off society and ultimately sucks the life out of it, to feed its bloated self, a process it is no longer in control of, which in turn takes us to The (Raleigh) News & Observer story “Lumber prices still sky-high amid COVID-19 shortage. What’s being done to get costs down?” by Bailey Aldridge on June 6, 2021, where we get further insight into “TOODLES's” statement “We’ve been fighting inflation that’s too low now for a decade,” to see where we are on that score, to wit:
RALEIGH — Lumber prices have continued surging in response to supply shortages spurred by the COVID-19 pandemic.
The lumber scarcity matched with increased demand during the pandemic drove costs sky-high, which in turn has increased construction and housing costs and left government officials and those within the industry grappling with how to rebound supply and bring costs down.
Between April 2020 and April 2021, the National Association of Home Builders said the “price per thousand board feet” increased by nearly 250% — from $350 to $1,200.
Prices then soared past $1,400 in early May and have continued increasing since.
The high lumber costs have increased the price of a single-family home by about $36,000, the NAHB says.
That’s priced “millions of middle-class households out of the market at a level they previously could afford.”
It’s also added nearly $13,000 to the cost of an “average new multifamily” home — meaning rent for a new apartment has gone up by about $119 each month.
end quotes
And you know what, people?
The fed loves that, because it to their benefit, not being of us, or a part of us, but a large blood-sucking parasite over us, which takes us back to that story, to wit:
What’s being done to bring lumber prices down?
The NAHB said it has called for “prompt action” from President Joe Biden’s administration and other officials and in late May discussed the soaring lumber prices with U.S. Secretary of Commerce Gina Raimondo.
“Raimondo and NAHB CEO Jerry Howard discussed working together on convening a summit that would include representatives from the U.S. government, the lumber supply chain and the home building industry,” it said.
end quotes
And Holy Cow, people, there is a solution alright – convene a summit, get all the right people in the room at the same time and have some palaver, and out of that will come something, else why have a summit in the first place?
Getting back to the story:
NAHB Chairman Chuck Fowke said in a news release that Raimondo acknowledged she and Biden are concerned about the effect of high lumber prices on the country’s economy.
“We take these issues seriously, and my staff and I are committed to continuing to work with all stakeholders, including reviewing relevant data and conducting analysis to identify targeted actions the government or industry can take to address supply chain constraints,” Raimondo said, according to the NAHB.
end quotes
And hey, Gina, dude, no rush!
Don’t get yourself all stressed out about something you’re totally out of your league in, other than issuing empty platitudinal statements to the effect you “take these issues seriously, and my staff and I are committed to continuing to work with all stakeholders, including reviewing relevant data and conducting analysis to identify targeted actions the government or industry can take to address supply chain constraints,”
Getting back to the story once again:
Some GOP lawmakers have criticized Biden for the high lumber costs, accusing him of “declaring war” on construction jobs and not taking enough action, Fox Business reported.
“Lumber prices are an issue that has many causes, from economic complications from the coronavirus pandemic to difficult trade issues with Canada.”
“Biden has shown he is either unwilling or incapable of tackling these obstacles,” Rep. Bob Gibbs of Ohio said in a statement to Fox News.
But Biden said during remarks in late May that rebooting the economy isn’t like “flipping on a light switch” and that there will be supply chain issues on the way to “steady growth.”
“In the coming weeks, my administration will take steps to combat these supply pressures, starting with the construction materials and transportation bottlenecks,” Biden said.
Some groups have urged Biden to remove lumber and steel tariffs imposed during President Donald Trump’s administration, CNN Business reports.
A White House spokesperson told CNN Business that the Biden administration is pursuing “every avenue that could help relieve bottlenecks and strengthen our economic recovery” and that it will continue to review Trump-era trade policies.
“Tariffs are one tool in the toolbox to support American workers and American industry,” the spokesperson said, according to CNN Business.
end quotes
Except tariffs, which benefit the treasury, are killing the home construction industry, and in the case of lumber, are doing doodly-squat to support American workers or American industry, but Joe needs those tariffs to support his massive and grandiose stimulation, so there we are and if we go back to the story once again, we will see that there is where we will remain, to wit:
What pushed prices so high?
Some sawmills were forced to shut down at the beginning of the pandemic, limiting lumber supplies.
At the same time, many American stuck at home due to COVID-19 restrictions stocked up on materials to complete do-it-yourself projects and demand for construction or home improvement projects increased.
Additionally, Fortune reports that many potential homebuyers opted for construction when record-low interest rates spurred a boom in the housing market, further driving up demand.
“It was the perfect storm,” Kari Doll, manager at a lumber yard in Montana, told the Bozeman Daily Chronicle.
The decrease in supply coupled with the increase in demand drove lumber prices sky-high.
Now, the backlogged supply hasn’t been able to catch up with the high demand and lumber prices have remained elevated.
Experts have offered varying projections on when prices could come down, with some saying they could ease in the summer and others saying it’s unclear when or if prices will return to where they were before the boom.
end quotes
Oh, well, should have built that new dog house last year, when it would still have been affordable!
Sorry, Fido, a tarp over the picnic table will have to suffice for now, and well, okay, quite a long time but thank God dogs are patient, or there might have been some leg-biting over that news.
http://www.capecharlesmirror.com/news/o ... ent-364784
Paul Plante says:
And speaking of having a crackpot economist in charge of our United States Treasury, and thus, essentially in charge of our lives, which is not a comforting thought at all, unless you are into and an advocate of HOODOO economics, a swirl of smaller crackpot theories rolled up into one major-league crackpot theory employed by Janet “TOODLES” Yellen, Joe Biden’s own personal financial guru, let’s go to a CNBC story entitled “Higher interest rates would be good for the country, Treasury Secretary Yellen says” by Emma Newburger published June 6, 2021, where we have this ignorant codswallop (nonsense, as in “I think that’s a right load of old codswallop”) from “TOODLES” which demonstrates how thin her grasp on the reality most of us who are not rich like her live our lives in, outside of her guarded and gated community where only the rich and privileged can go, to wit:
U.S. Treasury Secretary Janet Yellen said that President Joe Biden’s $4 trillion spending proposal would be positive for the country, even if it leads to a rise in interest rates.
“If we ended up with a slightly higher interest rate environment it would actually be a plus for society’s point of view and the Fed’s point of view,” Yellen told Bloomberg.
“We’ve been fighting inflation that’s too low and interest rates that are too low now for a decade,” she said.
She added that if the packages help at all to “alleviate things then that’s not a bad thing — that’s a good thing.”
end quotes
And that is from her perspective as someone who wants to protect her own net worth and has the political power to do so.
But historically speaking, what might be good for the fed is hardly good for society, since the federal reserve is a giant parasite that feeds off society and ultimately sucks the life out of it, to feed its bloated self, a process it is no longer in control of, which in turn takes us to The (Raleigh) News & Observer story “Lumber prices still sky-high amid COVID-19 shortage. What’s being done to get costs down?” by Bailey Aldridge on June 6, 2021, where we get further insight into “TOODLES's” statement “We’ve been fighting inflation that’s too low now for a decade,” to see where we are on that score, to wit:
RALEIGH — Lumber prices have continued surging in response to supply shortages spurred by the COVID-19 pandemic.
The lumber scarcity matched with increased demand during the pandemic drove costs sky-high, which in turn has increased construction and housing costs and left government officials and those within the industry grappling with how to rebound supply and bring costs down.
Between April 2020 and April 2021, the National Association of Home Builders said the “price per thousand board feet” increased by nearly 250% — from $350 to $1,200.
Prices then soared past $1,400 in early May and have continued increasing since.
The high lumber costs have increased the price of a single-family home by about $36,000, the NAHB says.
That’s priced “millions of middle-class households out of the market at a level they previously could afford.”
It’s also added nearly $13,000 to the cost of an “average new multifamily” home — meaning rent for a new apartment has gone up by about $119 each month.
end quotes
And you know what, people?
The fed loves that, because it to their benefit, not being of us, or a part of us, but a large blood-sucking parasite over us, which takes us back to that story, to wit:
What’s being done to bring lumber prices down?
The NAHB said it has called for “prompt action” from President Joe Biden’s administration and other officials and in late May discussed the soaring lumber prices with U.S. Secretary of Commerce Gina Raimondo.
“Raimondo and NAHB CEO Jerry Howard discussed working together on convening a summit that would include representatives from the U.S. government, the lumber supply chain and the home building industry,” it said.
end quotes
And Holy Cow, people, there is a solution alright – convene a summit, get all the right people in the room at the same time and have some palaver, and out of that will come something, else why have a summit in the first place?
Getting back to the story:
NAHB Chairman Chuck Fowke said in a news release that Raimondo acknowledged she and Biden are concerned about the effect of high lumber prices on the country’s economy.
“We take these issues seriously, and my staff and I are committed to continuing to work with all stakeholders, including reviewing relevant data and conducting analysis to identify targeted actions the government or industry can take to address supply chain constraints,” Raimondo said, according to the NAHB.
end quotes
And hey, Gina, dude, no rush!
Don’t get yourself all stressed out about something you’re totally out of your league in, other than issuing empty platitudinal statements to the effect you “take these issues seriously, and my staff and I are committed to continuing to work with all stakeholders, including reviewing relevant data and conducting analysis to identify targeted actions the government or industry can take to address supply chain constraints,”
Getting back to the story once again:
Some GOP lawmakers have criticized Biden for the high lumber costs, accusing him of “declaring war” on construction jobs and not taking enough action, Fox Business reported.
“Lumber prices are an issue that has many causes, from economic complications from the coronavirus pandemic to difficult trade issues with Canada.”
“Biden has shown he is either unwilling or incapable of tackling these obstacles,” Rep. Bob Gibbs of Ohio said in a statement to Fox News.
But Biden said during remarks in late May that rebooting the economy isn’t like “flipping on a light switch” and that there will be supply chain issues on the way to “steady growth.”
“In the coming weeks, my administration will take steps to combat these supply pressures, starting with the construction materials and transportation bottlenecks,” Biden said.
Some groups have urged Biden to remove lumber and steel tariffs imposed during President Donald Trump’s administration, CNN Business reports.
A White House spokesperson told CNN Business that the Biden administration is pursuing “every avenue that could help relieve bottlenecks and strengthen our economic recovery” and that it will continue to review Trump-era trade policies.
“Tariffs are one tool in the toolbox to support American workers and American industry,” the spokesperson said, according to CNN Business.
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Except tariffs, which benefit the treasury, are killing the home construction industry, and in the case of lumber, are doing doodly-squat to support American workers or American industry, but Joe needs those tariffs to support his massive and grandiose stimulation, so there we are and if we go back to the story once again, we will see that there is where we will remain, to wit:
What pushed prices so high?
Some sawmills were forced to shut down at the beginning of the pandemic, limiting lumber supplies.
At the same time, many American stuck at home due to COVID-19 restrictions stocked up on materials to complete do-it-yourself projects and demand for construction or home improvement projects increased.
Additionally, Fortune reports that many potential homebuyers opted for construction when record-low interest rates spurred a boom in the housing market, further driving up demand.
“It was the perfect storm,” Kari Doll, manager at a lumber yard in Montana, told the Bozeman Daily Chronicle.
The decrease in supply coupled with the increase in demand drove lumber prices sky-high.
Now, the backlogged supply hasn’t been able to catch up with the high demand and lumber prices have remained elevated.
Experts have offered varying projections on when prices could come down, with some saying they could ease in the summer and others saying it’s unclear when or if prices will return to where they were before the boom.
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Oh, well, should have built that new dog house last year, when it would still have been affordable!
Sorry, Fido, a tarp over the picnic table will have to suffice for now, and well, okay, quite a long time but thank God dogs are patient, or there might have been some leg-biting over that news.
http://www.capecharlesmirror.com/news/o ... ent-364784