CNBC
"Rents for single-family homes just saw the largest gains in nearly 15 years"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED TUE, JUN 15 2021
KEY POINTS
* Single-family rents were up 5.3% year over year in April, rising from a 2.4% increase in April 2020, according to CoreLogic.
* That is the largest annual gain in nearly 15 years.
* Regionally, by top 20 metropolitan markets, rent gains were highest in Phoenix
Even as the coronavirus pandemic ebbs and Americans get back to work and play, they still want more space at home.
But with home prices hitting record highs, demand for single-family rental homes is soaring – and so are the rents.
Single-family rents were up 5.3% year over year in April, rising from a 2.4% increase in April 2020, according to CoreLogic.
That is the largest gain in nearly 15 years.
Rents for single-family detached homes (not townhomes), were up an even stronger 7.9% compared with a year ago, as millennials in particular seek more outdoor space.
Nearly half of millennials surveyed by Corelogic, and 64% of baby boomers, said they, “strongly prefer” to live in a single, stand-alone home.
“Single-family rent growth showed a strong rebound in April 2021 with all price tiers back above their pre-pandemic rent growth rate,” said Molly Boesel, principal economist at CoreLogic.
“While rent growth slowed last April at the start of the pandemic, the rate of rent growth this April was running above pre-pandemic levels even when compared with 2019 and shows no signs of diminishing.”
The rent gains are across all price categories, even low end, which exceeded pre-pandemic rent increases for the first time.
By category, the gains are as follows:
Lower priced (75% or less than the regional median): 3.9%, up from 3.2% in April 2020
Lower-middle priced (75% to 100% of the regional median): 4.8%, up from 2.5% in April 2020
Higher-middle priced (100% to 125% of the regional median): 5.1%, up from 2.3% in April 2020
Higher priced (125% or more than the regional median): 6.1%, up from 2.2% in April 2020
Regionally, by top 20 metropolitan markets, rent gains were highest in Phoenix, where single-family rents were 12.2% higher than a year ago.
Next, Tucson, Arizona, with a gain of 10.6%.
That was followed by Las Vegas at 9.3%.
Atlanta, which had the lowest unemployment rate of the 20 metros, came in fourth at 9.1%.
On the flip side, Boston saw an annual decline of 5.9% in rent prices and has experienced the largest decrease of the 20 metropolitan market rent prices for nine straight months.
Chicago was the only other decliner, at 2.6%.
With home prices continuing to gain at a double-digit pace, and more potential buyers being priced out, demand for single-family rentals is unlikely to cool anytime soon.
“The inflation that is currently here is slowing the most interest rate sensitive part of the economy, that being housing,” said Peter Boockvar, chief investment officer at the Bleakley Advisory Group.
https://www.cnbc.com/2021/06/15/rents-f ... years.html
THE HOUSING MARKET
Re: THE HOUSING MARKET
CNBC
"U.S. housing starts rise less than expected in May; building permits fall"
Reuters
PUBLISHED WED, JUN 16 2021
KEY POINTS
* U.S. homebuilding rebounded in May, supported by an acute shortage of previously owned homes available for sale.
* Construction continues to be hampered by very expensive lumber and shortages of other building materials.
* Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.572 million units last month, the Commerce Department said.
U.S. homebuilding rebounded in May, supported by an acute shortage of previously owned homes available for sale, but construction continues to be hampered by very expensive lumber and shortages of other building materials.
Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.572 million units last month, the Commerce Department said on Wednesday.
Data for April was revised down to a rate of 1.517 million units from the previously reported 1.569 million units.
Economists polled by Reuters had forecast starts increasing to a rate of 1.630 million units.
Last month’s increase left starts lower than March’s rate of 1.733 million units, which was the highest level since June 2006.
Though lumber prices dropped from a record high set in early May, softwood lumber prices increased 154.3% year-on-year in May, according to the latest producer pricer data.
A survey from the National Association of Home Builders on Tuesday showed confidence among single-family homebuilders fell to a 10-month low in June.
The NAHB blamed the ebb in sentiment on “higher costs and declining availability for softwood lumber and other building materials,” noting that was driving up prices of new houses “which has slowed the strong pace of home building.”
Permits for future homebuilding fell 3.0% to a rate of 1.681 million units in May.
Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom.
But supply is tight, with the inventory of previously owned homes near record lows.
https://www.cnbc.com/2021/06/16/us-hous ... -2021.html
"U.S. housing starts rise less than expected in May; building permits fall"
Reuters
PUBLISHED WED, JUN 16 2021
KEY POINTS
* U.S. homebuilding rebounded in May, supported by an acute shortage of previously owned homes available for sale.
* Construction continues to be hampered by very expensive lumber and shortages of other building materials.
* Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.572 million units last month, the Commerce Department said.
U.S. homebuilding rebounded in May, supported by an acute shortage of previously owned homes available for sale, but construction continues to be hampered by very expensive lumber and shortages of other building materials.
Housing starts rose 3.6% to a seasonally adjusted annual rate of 1.572 million units last month, the Commerce Department said on Wednesday.
Data for April was revised down to a rate of 1.517 million units from the previously reported 1.569 million units.
Economists polled by Reuters had forecast starts increasing to a rate of 1.630 million units.
Last month’s increase left starts lower than March’s rate of 1.733 million units, which was the highest level since June 2006.
Though lumber prices dropped from a record high set in early May, softwood lumber prices increased 154.3% year-on-year in May, according to the latest producer pricer data.
A survey from the National Association of Home Builders on Tuesday showed confidence among single-family homebuilders fell to a 10-month low in June.
The NAHB blamed the ebb in sentiment on “higher costs and declining availability for softwood lumber and other building materials,” noting that was driving up prices of new houses “which has slowed the strong pace of home building.”
Permits for future homebuilding fell 3.0% to a rate of 1.681 million units in May.
Demand for bigger and more expensive accommodations amid the COVID-19 pandemic, which has left millions of Americans still working from home, is driving a housing market boom.
But supply is tight, with the inventory of previously owned homes near record lows.
https://www.cnbc.com/2021/06/16/us-hous ... -2021.html
Re: THE HOUSING MARKET
CNBC
"Mortgage rates shoot higher after Fed Chairman Powell’s comments"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED THU, JUN 17 2021
KEY POINTS
* The average rate on the popular 30-year fixed mortgage moved decidedly higher, hitting 3.25%, according to Mortgage News Daily.
* Last fall, mortgage rates dropped dramatically, and by February of this year, the average rate on the 30-year fixed was at 2.75%.
The average rate on the popular 30-year fixed mortgage moved decidedly higher Thursday, hitting 3.25%, according to Mortgage News Daily.
That is the highest rate since mid-April.
The move was a reaction to comments made Wednesday by Federal Reserve Chairman Jerome Powell following the central bank’s meeting this week.
Fed officials indicated that rate hikes could come in 2023, although they didn’t mention when they would start scaling back their massive bond-buying program.
“You can think of this meeting that we had as the ‘talking about talking about’ meeting,” Powell said, recalling a statement he made in 2020 that the bank wasn’t “thinking about thinking about raising rates.”
Mortgage rates even moved higher Tuesday in anticipation of the Fed meeting.
Mortgage rates do not follow the federal funds rate, which was unchanged Wednesday, but generally track the yield on the 10-year Treasury, which moved higher.
Mortgage rates are also affected greatly by the amount of mortgage-backed bonds the Fed purchases.
That’s what caught some investors off guard and caused bond yields and mortgage rates to move higher than expected.
“Markets were somewhat surprised by the Fed’s rate hike outlook."
"Granted, the Fed Funds Rate doesn’t control mortgage rates, but the outlook speaks to how quickly the Fed would need to dial back its bond buying programs (aka ‘tapering’)."
"Those programs definitely help keep rates low,” noted Matthew Graham, chief operating officer of Mortgage News Daily.
The sooner the Fed starts to taper, the sooner mortgage rates move higher, as happened in the last so-called taper tantrum in June 2013.
Mortgage rates are now nearly a quarter of a percentage point higher than they were last Friday and about a quarter of a percentage point higher than they were a year ago.
While that may not sound like a lot, it is significant for those looking to save on their monthly payments through a refinance.
The general rule of thumb is that if you can’t save at least half a percentage point on your rate, like going from 3.5% to 3.0%, then it’s not worth the costs involved.
Last fall, rates dropped dramatically, and by February of this year, the average rate on the 30-year fixed was at 2.75%.
That caused a refinance boom.
Now, applications to refinance a home loan are 22% lower than they were a year ago, according to the Mortgage Bankers Association.
There are now far fewer borrowers who can benefit from a refinance.
As for homebuyers, given today’s sky-high home prices, any move higher in rates is not only going to hit the monthly payment but may make it harder to qualify for the loan.
“For home buyers, this means it’s a good idea to take a fresh look at your home shopping budget."
"Run the numbers and know what it means for your search price if rates tick up a quarter point, but keep these worries in context,” said Danielle Hale, chief economist for realtor.com.
“Even if mortgage rates rise, they are not the biggest challenge for today’s buyers, who are still contending with relatively few, fast-selling home choices and record high asking prices,” she said.
https://www.cnbc.com/2021/06/17/mortgag ... ments.html
"Mortgage rates shoot higher after Fed Chairman Powell’s comments"
Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK
PUBLISHED THU, JUN 17 2021
KEY POINTS
* The average rate on the popular 30-year fixed mortgage moved decidedly higher, hitting 3.25%, according to Mortgage News Daily.
* Last fall, mortgage rates dropped dramatically, and by February of this year, the average rate on the 30-year fixed was at 2.75%.
The average rate on the popular 30-year fixed mortgage moved decidedly higher Thursday, hitting 3.25%, according to Mortgage News Daily.
That is the highest rate since mid-April.
The move was a reaction to comments made Wednesday by Federal Reserve Chairman Jerome Powell following the central bank’s meeting this week.
Fed officials indicated that rate hikes could come in 2023, although they didn’t mention when they would start scaling back their massive bond-buying program.
“You can think of this meeting that we had as the ‘talking about talking about’ meeting,” Powell said, recalling a statement he made in 2020 that the bank wasn’t “thinking about thinking about raising rates.”
Mortgage rates even moved higher Tuesday in anticipation of the Fed meeting.
Mortgage rates do not follow the federal funds rate, which was unchanged Wednesday, but generally track the yield on the 10-year Treasury, which moved higher.
Mortgage rates are also affected greatly by the amount of mortgage-backed bonds the Fed purchases.
That’s what caught some investors off guard and caused bond yields and mortgage rates to move higher than expected.
“Markets were somewhat surprised by the Fed’s rate hike outlook."
"Granted, the Fed Funds Rate doesn’t control mortgage rates, but the outlook speaks to how quickly the Fed would need to dial back its bond buying programs (aka ‘tapering’)."
"Those programs definitely help keep rates low,” noted Matthew Graham, chief operating officer of Mortgage News Daily.
The sooner the Fed starts to taper, the sooner mortgage rates move higher, as happened in the last so-called taper tantrum in June 2013.
Mortgage rates are now nearly a quarter of a percentage point higher than they were last Friday and about a quarter of a percentage point higher than they were a year ago.
While that may not sound like a lot, it is significant for those looking to save on their monthly payments through a refinance.
The general rule of thumb is that if you can’t save at least half a percentage point on your rate, like going from 3.5% to 3.0%, then it’s not worth the costs involved.
Last fall, rates dropped dramatically, and by February of this year, the average rate on the 30-year fixed was at 2.75%.
That caused a refinance boom.
Now, applications to refinance a home loan are 22% lower than they were a year ago, according to the Mortgage Bankers Association.
There are now far fewer borrowers who can benefit from a refinance.
As for homebuyers, given today’s sky-high home prices, any move higher in rates is not only going to hit the monthly payment but may make it harder to qualify for the loan.
“For home buyers, this means it’s a good idea to take a fresh look at your home shopping budget."
"Run the numbers and know what it means for your search price if rates tick up a quarter point, but keep these worries in context,” said Danielle Hale, chief economist for realtor.com.
“Even if mortgage rates rise, they are not the biggest challenge for today’s buyers, who are still contending with relatively few, fast-selling home choices and record high asking prices,” she said.
https://www.cnbc.com/2021/06/17/mortgag ... ments.html
Re: THE HOUSING MARKET
REUTERS
"Record-high U.S. house prices, tight supply weigh on sales"
Lucia Mutikani
June 22, 2021
Summary
* Existing home sales fall 0.9% in May
* Median house price surges 23.6% from year ago
* Housing inventory drops 20.6% from year ago
WASHINGTON, June 22 (Reuters) - U.S. home sales fell for a fourth straight month in May as record-high prices amid low inventory frustrated potential buyers, a trend that could persist for a while, with builders unable to deliver more houses because of expensive lumber.
The decline in sales reported by the National Association of Realtors on Tuesday was concentrated in the single-family housing segment, which benefited from a migration from cities as millions of Americans sought more spacious accommodations for home offices and schooling during the COVID-19 pandemic.
Sales are retreating back to their pre-pandemic levels, indicating that the tailwind from the virus is diminishing.
"It's becoming clear that record-high price growth and an enduring shortage of available homes are beginning to hinder would-be homebuyers," said Matthew Speakman, an economist at Zillow.
"Sales volume continues to struggle to regain the momentum it built late last year."
Existing home sales dropped 0.9% to a seasonally adjusted annual rate of 5.80 million units last month.
Sales fell in the Northeast, West and the densely populated South.
They, however, rose in the Midwest, which is generally considered as having more affordable homes.
Economists polled by Reuters had forecast sales would fall to a rate of 5.72 million units in May.
Home resales, which account for the bulk of U.S. home sales, surged 44.6% on a year-on-year basis.
The annual increase was, however, distorted by the plunge in sales in May 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.
The median existing house price accelerated a record 23.6% from a year ago to an all-time high of $350,300 in May, with sales remaining skewed towards bigger and more expensive homes.
U.S. stocks were mostly higher.
The dollar was steady against a basket of currencies.
U.S. Treasury prices were mixed.
BIDDING WARS
Single-family home sales, the largest segment of the housing market, dropped 1.0% to a pace of 5.08 million units, the lowest since last June.
Sales of multi-family homes were unchanged, though they continue to rebound as more people return to cities.
At least 150 million Americans have been fully vaccinated against COVID-19, allowing the economy to begin reopening and companies to recall workers back to offices.
"The pandemic-driven tailwind home sales have enjoyed appears to be lessening," said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina.
"Much of the speculation about how many workers would work remotely indefinitely appear to have been greatly exaggerated."
Housing supply was already tight before the pandemic.
With the public health situation brightening, there is cautious optimism that inventory will improve.
Some homeowners were reluctant to list their homes because of fear of contracting the virus from potential buyers touring their properties.
Some elderly Americans likely delayed downsizing due to the pandemic.
Economists are also hopeful that higher prices will entice some owners to put their homes on the market.
There were 1.23 million previously owned homes available for sale in May, up 7.0% from April and down 20.6% from one year ago.
While the monthly improvement in inventory is welcome, the supply gap could take a long time to close.
The pandemic has disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials.
Though lumber prices have eased from recent record highs, they remain exorbitant, limiting builders' ability to ramp up construction of new homes.
The government last week reported a moderate rebound in homebuilding in May and a drop in permits.
"A lack of availability and affordability concerns will likely be headwinds until supply constraints ease," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
That has led some economists to expect that housing would be a drag on gross domestic product growth in the second quarter after hefty contributions since the third quarter of 2020.
At May's sales pace, it would take 2.5 months to exhaust the current inventory, down from 4.6 months a year ago.
A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
Properties typically remained on the market for only 17 days in May, down from 26 days a year ago.
There are widespread bidding wars, with institutional buyers reported to be outbidding other buyers.
First-time buyers accounted for 31% of sales in May, down from 34% a year ago.
All-cash sales made up 23% of transactions, up from 17% last May.
Economists do not believe another housing bubble is developing, noting that the price surge is being mostly driven by a mismatch between supply and demand, rather than poor lending practices, which triggered the 2008 global financial crisis.
But the rapidly rising prices could feed inflation.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
https://www.reuters.com/business/us-exi ... 021-06-22/
"Record-high U.S. house prices, tight supply weigh on sales"
Lucia Mutikani
June 22, 2021
Summary
* Existing home sales fall 0.9% in May
* Median house price surges 23.6% from year ago
* Housing inventory drops 20.6% from year ago
WASHINGTON, June 22 (Reuters) - U.S. home sales fell for a fourth straight month in May as record-high prices amid low inventory frustrated potential buyers, a trend that could persist for a while, with builders unable to deliver more houses because of expensive lumber.
The decline in sales reported by the National Association of Realtors on Tuesday was concentrated in the single-family housing segment, which benefited from a migration from cities as millions of Americans sought more spacious accommodations for home offices and schooling during the COVID-19 pandemic.
Sales are retreating back to their pre-pandemic levels, indicating that the tailwind from the virus is diminishing.
"It's becoming clear that record-high price growth and an enduring shortage of available homes are beginning to hinder would-be homebuyers," said Matthew Speakman, an economist at Zillow.
"Sales volume continues to struggle to regain the momentum it built late last year."
Existing home sales dropped 0.9% to a seasonally adjusted annual rate of 5.80 million units last month.
Sales fell in the Northeast, West and the densely populated South.
They, however, rose in the Midwest, which is generally considered as having more affordable homes.
Economists polled by Reuters had forecast sales would fall to a rate of 5.72 million units in May.
Home resales, which account for the bulk of U.S. home sales, surged 44.6% on a year-on-year basis.
The annual increase was, however, distorted by the plunge in sales in May 2020, when the economy was reeling from mandatory shutdowns of non-essential businesses to slow the first wave of COVID-19 cases.
The median existing house price accelerated a record 23.6% from a year ago to an all-time high of $350,300 in May, with sales remaining skewed towards bigger and more expensive homes.
U.S. stocks were mostly higher.
The dollar was steady against a basket of currencies.
U.S. Treasury prices were mixed.
BIDDING WARS
Single-family home sales, the largest segment of the housing market, dropped 1.0% to a pace of 5.08 million units, the lowest since last June.
Sales of multi-family homes were unchanged, though they continue to rebound as more people return to cities.
At least 150 million Americans have been fully vaccinated against COVID-19, allowing the economy to begin reopening and companies to recall workers back to offices.
"The pandemic-driven tailwind home sales have enjoyed appears to be lessening," said Mark Vitner, a senior economist at Wells Fargo in Charlotte, North Carolina.
"Much of the speculation about how many workers would work remotely indefinitely appear to have been greatly exaggerated."
Housing supply was already tight before the pandemic.
With the public health situation brightening, there is cautious optimism that inventory will improve.
Some homeowners were reluctant to list their homes because of fear of contracting the virus from potential buyers touring their properties.
Some elderly Americans likely delayed downsizing due to the pandemic.
Economists are also hopeful that higher prices will entice some owners to put their homes on the market.
There were 1.23 million previously owned homes available for sale in May, up 7.0% from April and down 20.6% from one year ago.
While the monthly improvement in inventory is welcome, the supply gap could take a long time to close.
The pandemic has disrupted labor supply at saw mills and ports, causing shortages of lumber and other raw materials.
Though lumber prices have eased from recent record highs, they remain exorbitant, limiting builders' ability to ramp up construction of new homes.
The government last week reported a moderate rebound in homebuilding in May and a drop in permits.
"A lack of availability and affordability concerns will likely be headwinds until supply constraints ease," said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
That has led some economists to expect that housing would be a drag on gross domestic product growth in the second quarter after hefty contributions since the third quarter of 2020.
At May's sales pace, it would take 2.5 months to exhaust the current inventory, down from 4.6 months a year ago.
A six-to-seven-month supply is viewed as a healthy balance between supply and demand.
Properties typically remained on the market for only 17 days in May, down from 26 days a year ago.
There are widespread bidding wars, with institutional buyers reported to be outbidding other buyers.
First-time buyers accounted for 31% of sales in May, down from 34% a year ago.
All-cash sales made up 23% of transactions, up from 17% last May.
Economists do not believe another housing bubble is developing, noting that the price surge is being mostly driven by a mismatch between supply and demand, rather than poor lending practices, which triggered the 2008 global financial crisis.
But the rapidly rising prices could feed inflation.
Reporting by Lucia Mutikani; Editing by Andrea Ricci
https://www.reuters.com/business/us-exi ... 021-06-22/
Re: THE HOUSING MARKET
REUTERS
"U.S. new home sales hit one-year low; prices soar"
By Lucia Mutikani
JUNE 23, 2021
WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell to a one-year low in May as the median price of newly built houses soared amid expensive raw materials, including framing lumber.
The second straight monthly decline in sales reported by the Commerce Department on Wednesday was the latest indication that the tailwind from the COVID-19 pandemic could be subsiding.
Single-family housing benefited from a migration from cities as millions of Americans sought more spacious accommodations for home offices and schooling during the pandemic.
“New home sales along with existing home sales suggest home buying activity is past its peak,” said Chris Rupkey, chief economist at FWDBONDS in New York.
“We don’t know what is going to happen when the stay-at-home economy shifts to going back to the office.”
New home sales dropped 5.9% to a seasonally adjusted annual rate of 769,000 units last month, the lowest level since May 2020.
April’s sales pace was revised down to 817,000 units from the previously reported 863,000 units.
New home sales are considered a leading housing market indicator as they are recorded when contracts are signed.
Last month’s decline was concentrated in the populous South, where sales tumbled 14.5%.
Sales, however, rose in the Northeast and West.
They were unchanged in the Midwest.
Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, would be at a rate of 870,000 units in May.
New home sales are drawn from a sample of houses selected from building permits and tend to be volatile on a month-to-month basis.
Sales rose 9.2% on a year-on-year basis in May.
The median new house price jumped 18.1% from a year earlier to $374,400 in May.
U.S. stocks were mixed.
The dollar was steady against a basket of currencies.
U.S. Treasury prices were lower.
INVENTORY SQUEEZE
The market for new homes is being supported by a dearth of previously owned houses.
At least 150 million Americans have been fully vaccinated against the coronavirus, allowing the economy to begin reopening and companies to recall workers back to offices.
A report from the National Association of Realtors on Tuesday showed sales of previously owned homes fell for a fourth straight month in May.
Builders have failed to take advantage of the inventory squeeze because of shortages of lumber and other raw materials.
Exorbitant prices for raw materials are significantly raising the prices of newly built homes.
At the same time, the supply gap is boosting competition for available homes, threatening to sideline some first-time buyers from the market.
The supply-side constraints were also underscored by a separate survey from data firm IHS Markit on Wednesday showing manufacturers struggling to source raw materials this month.
New home sales last month were concentrated in the $200,000-$749,000 price range.
Sales below the $200,000 price bracket, the sought-after segment of the market, accounted for only 2% of transactions last month.
There were 330,000 new homes on the market last month, up from 315,000 in April.
At May’s sales pace it would take 5.1 months to clear the supply of houses on the market, up from 4.6 months in April.
About 76% of homes sold last month were either under construction or yet to be built.
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/article/usa-eco ... SL2N2O51JE
"U.S. new home sales hit one-year low; prices soar"
By Lucia Mutikani
JUNE 23, 2021
WASHINGTON (Reuters) - Sales of new U.S. single-family homes fell to a one-year low in May as the median price of newly built houses soared amid expensive raw materials, including framing lumber.
The second straight monthly decline in sales reported by the Commerce Department on Wednesday was the latest indication that the tailwind from the COVID-19 pandemic could be subsiding.
Single-family housing benefited from a migration from cities as millions of Americans sought more spacious accommodations for home offices and schooling during the pandemic.
“New home sales along with existing home sales suggest home buying activity is past its peak,” said Chris Rupkey, chief economist at FWDBONDS in New York.
“We don’t know what is going to happen when the stay-at-home economy shifts to going back to the office.”
New home sales dropped 5.9% to a seasonally adjusted annual rate of 769,000 units last month, the lowest level since May 2020.
April’s sales pace was revised down to 817,000 units from the previously reported 863,000 units.
New home sales are considered a leading housing market indicator as they are recorded when contracts are signed.
Last month’s decline was concentrated in the populous South, where sales tumbled 14.5%.
Sales, however, rose in the Northeast and West.
They were unchanged in the Midwest.
Economists polled by Reuters had forecast new home sales, which account for a small share of U.S. home sales, would be at a rate of 870,000 units in May.
New home sales are drawn from a sample of houses selected from building permits and tend to be volatile on a month-to-month basis.
Sales rose 9.2% on a year-on-year basis in May.
The median new house price jumped 18.1% from a year earlier to $374,400 in May.
U.S. stocks were mixed.
The dollar was steady against a basket of currencies.
U.S. Treasury prices were lower.
INVENTORY SQUEEZE
The market for new homes is being supported by a dearth of previously owned houses.
At least 150 million Americans have been fully vaccinated against the coronavirus, allowing the economy to begin reopening and companies to recall workers back to offices.
A report from the National Association of Realtors on Tuesday showed sales of previously owned homes fell for a fourth straight month in May.
Builders have failed to take advantage of the inventory squeeze because of shortages of lumber and other raw materials.
Exorbitant prices for raw materials are significantly raising the prices of newly built homes.
At the same time, the supply gap is boosting competition for available homes, threatening to sideline some first-time buyers from the market.
The supply-side constraints were also underscored by a separate survey from data firm IHS Markit on Wednesday showing manufacturers struggling to source raw materials this month.
New home sales last month were concentrated in the $200,000-$749,000 price range.
Sales below the $200,000 price bracket, the sought-after segment of the market, accounted for only 2% of transactions last month.
There were 330,000 new homes on the market last month, up from 315,000 in April.
At May’s sales pace it would take 5.1 months to clear the supply of houses on the market, up from 4.6 months in April.
About 76% of homes sold last month were either under construction or yet to be built.
Reporting by Lucia Mutikani; Editing by Paul Simao
https://www.reuters.com/article/usa-eco ... SL2N2O51JE
Re: THE HOUSING MARKET
REUTERS
"U.S. consumer confidence at 16-month high; house price inflation heating up"
By Lucia Mutikani
JUNE 29, 2021
WASHINGTON (Reuters) - U.S. consumer confidence jumped to its highest level in nearly 1-1/2 years in June as growing labor market optimism amid a reopening economy offset concerns about higher inflation.
The survey from the Conference Board on Tuesday also showed a healthy appetite for long-lasting manufactured goods such as motor vehicles and household appliances, suggesting strong momentum in the economy as the second quarter ended.
Consumers were also keen to purchase homes, a sign that house prices will continue to rapidly increase as supply lags.
Many intended to go on vacation, mostly in the United States, over the next six months, which should boost demand for services and add fuel to consumer spending.
“Consumers have plenty to be cheerful about after being cooped up at home for more than a year,” said Oren Klachkin, lead U.S. economist at Oxford Economics in New York.
“Looking ahead, low COVID infections, rebounding employment, and elevated savings will buoy confidence and push consumers to spend at a breakneck pace over the summer.”
The Conference Board’s consumer confidence index raced to a reading of 127.3 this month, the highest level since February 2020, from 120.0 in May.
Economists polled by Reuters had forecast the index at 119.0.
The survey places more emphasis on the labor market, which is steadily recovering.
More than 150 million Americans have been fully vaccinated against the coronavirus, allowing for broader economic re-engagement.
The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, increased to 157.7 from 148.7 last month.
The expectations index, based on consumers’ short-term outlook for income, business and labor market conditions, rose to 107.0 from 100.9.
Consumers’ inflation expectations over the next 12 months rose to 6.7% from 6.5% last month.
Stocks on Wall Street rose, with the S&P 500 hitting a record high for the fourth straight session.
The dollar rose against a basket of currencies.
U.S. Treasury prices were lower.
STRONG LABOR MARKET VIEWS
The Conference Board survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, vaulted to 43.5 in June.
That was the highest level since 2000 and was up from 36.9 in May.
This measure closely correlates to the unemployment rate in the Labor Department’s closely watched employment report.
The jump in the so-called labor market differential augurs well for June’s employment report due out on Friday.
There are a record 9.3 million job openings.
“This could indicate one million new nonfarm payroll jobs in Friday’s report if the consumer is right,” said Chris Rupkey, chief economist at FWDBONDS in New York.
According a Reuters survey of economists, nonfarm payrolls likely increased by 690,000 jobs in June after rising 559,000 in May.
The unemployment rate is forecast falling to 5.7% from 5.8%.
Though job growth has picked up, a shortage of willing workers is frustrating companies’ efforts to ramp up hiring.
The worker shortage has been blamed on generous unemployment benefits, including a weekly $300 subsidy from the federal government.
A lack of child care facilities as some centers which shut during the pandemic never reopened, is also keeping some parents home.
At least 26 states are terminating federal government-funded unemployment benefits before the Sept. 6 expiration date.
This, together with school districts expected to resume in-person classes in the fall, is seen expanding the labor pool.
This month, more consumers planned to buy homes, cars and major household appliances over the next six months, relative to May.
That suggests demand for so-called durable goods will remain strong even as spending shifts backs to services such as air travel, dining out and hotel accommodation.
Economists are forecasting another double-digit rise in consumer spending this quarter, which is expected to lead to the economy growing at about a 10% annualized rate.
Gross domestic product expanded at a 6.4% pace in the first quarter.
Accelerating home prices are curbing sales, which will likely limit the housing market’s contribution to GDP growth this quarter.
Demand for housing is being driven by historically low mortgage rates and shift to home offices during the pandemic.
Other parts of the economy are also experiencing shortages and high prices because of bottlenecks in the supply chain.
A separate report on Tuesday showed the S&P/Case Shiller composite index of 20 metropolitan areas accelerated 14.9% year-on-year in April, the largest gain since December 2005.
That followed a 13.4% increase in March.
Soaring house price inflation was corroborated by another report showing the Federal Housing Finance Agency (FHFA) house price index shot up a record 15.7% in April from a year ago after rising 14.0% in March.
Economists do not believe another housing bubble is developing as the surge is being mostly driven by a mismatch between supply and demand, rather than poor lending practices, which triggered the 2008 global financial crisis.
“We often get asked if we are in a housing bubble, but that is not necessarily the case,” said Jordan van Rijn, senior economist at the Credit Union National Association.
“There are structural factors at play, such as lower supply of existing homes, a shortage of materials and labor, and higher cost in materials.”
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/article/us-usa- ... SKCN2E51O1
"U.S. consumer confidence at 16-month high; house price inflation heating up"
By Lucia Mutikani
JUNE 29, 2021
WASHINGTON (Reuters) - U.S. consumer confidence jumped to its highest level in nearly 1-1/2 years in June as growing labor market optimism amid a reopening economy offset concerns about higher inflation.
The survey from the Conference Board on Tuesday also showed a healthy appetite for long-lasting manufactured goods such as motor vehicles and household appliances, suggesting strong momentum in the economy as the second quarter ended.
Consumers were also keen to purchase homes, a sign that house prices will continue to rapidly increase as supply lags.
Many intended to go on vacation, mostly in the United States, over the next six months, which should boost demand for services and add fuel to consumer spending.
“Consumers have plenty to be cheerful about after being cooped up at home for more than a year,” said Oren Klachkin, lead U.S. economist at Oxford Economics in New York.
“Looking ahead, low COVID infections, rebounding employment, and elevated savings will buoy confidence and push consumers to spend at a breakneck pace over the summer.”
The Conference Board’s consumer confidence index raced to a reading of 127.3 this month, the highest level since February 2020, from 120.0 in May.
Economists polled by Reuters had forecast the index at 119.0.
The survey places more emphasis on the labor market, which is steadily recovering.
More than 150 million Americans have been fully vaccinated against the coronavirus, allowing for broader economic re-engagement.
The survey’s present situation measure, based on consumers’ assessment of current business and labor market conditions, increased to 157.7 from 148.7 last month.
The expectations index, based on consumers’ short-term outlook for income, business and labor market conditions, rose to 107.0 from 100.9.
Consumers’ inflation expectations over the next 12 months rose to 6.7% from 6.5% last month.
Stocks on Wall Street rose, with the S&P 500 hitting a record high for the fourth straight session.
The dollar rose against a basket of currencies.
U.S. Treasury prices were lower.
STRONG LABOR MARKET VIEWS
The Conference Board survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, vaulted to 43.5 in June.
That was the highest level since 2000 and was up from 36.9 in May.
This measure closely correlates to the unemployment rate in the Labor Department’s closely watched employment report.
The jump in the so-called labor market differential augurs well for June’s employment report due out on Friday.
There are a record 9.3 million job openings.
“This could indicate one million new nonfarm payroll jobs in Friday’s report if the consumer is right,” said Chris Rupkey, chief economist at FWDBONDS in New York.
According a Reuters survey of economists, nonfarm payrolls likely increased by 690,000 jobs in June after rising 559,000 in May.
The unemployment rate is forecast falling to 5.7% from 5.8%.
Though job growth has picked up, a shortage of willing workers is frustrating companies’ efforts to ramp up hiring.
The worker shortage has been blamed on generous unemployment benefits, including a weekly $300 subsidy from the federal government.
A lack of child care facilities as some centers which shut during the pandemic never reopened, is also keeping some parents home.
At least 26 states are terminating federal government-funded unemployment benefits before the Sept. 6 expiration date.
This, together with school districts expected to resume in-person classes in the fall, is seen expanding the labor pool.
This month, more consumers planned to buy homes, cars and major household appliances over the next six months, relative to May.
That suggests demand for so-called durable goods will remain strong even as spending shifts backs to services such as air travel, dining out and hotel accommodation.
Economists are forecasting another double-digit rise in consumer spending this quarter, which is expected to lead to the economy growing at about a 10% annualized rate.
Gross domestic product expanded at a 6.4% pace in the first quarter.
Accelerating home prices are curbing sales, which will likely limit the housing market’s contribution to GDP growth this quarter.
Demand for housing is being driven by historically low mortgage rates and shift to home offices during the pandemic.
Other parts of the economy are also experiencing shortages and high prices because of bottlenecks in the supply chain.
A separate report on Tuesday showed the S&P/Case Shiller composite index of 20 metropolitan areas accelerated 14.9% year-on-year in April, the largest gain since December 2005.
That followed a 13.4% increase in March.
Soaring house price inflation was corroborated by another report showing the Federal Housing Finance Agency (FHFA) house price index shot up a record 15.7% in April from a year ago after rising 14.0% in March.
Economists do not believe another housing bubble is developing as the surge is being mostly driven by a mismatch between supply and demand, rather than poor lending practices, which triggered the 2008 global financial crisis.
“We often get asked if we are in a housing bubble, but that is not necessarily the case,” said Jordan van Rijn, senior economist at the Credit Union National Association.
“There are structural factors at play, such as lower supply of existing homes, a shortage of materials and labor, and higher cost in materials.”
Reporting By Lucia Mutikani; Editing by Chizu Nomiyama and Andrea Ricci
https://www.reuters.com/article/us-usa- ... SKCN2E51O1
Re: THE HOUSING MARKET
REUTERS
"U.S. home prices rose in April at fastest pace in 15 years - S&P/Case-Shiller"
Evan Sully
June 29, 2021
June 29 (Reuters) - U.S. single-family home prices in 20 key urban markets rose in April from a year earlier by the most in over 15 years as the shortage of homes available to buy drives up prices at the fastest rate seen since before the financial crisis, a closely watched survey said on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 14.9% through the 12 months ended in April, the largest annual price increase since December 2005.
A Reuters poll of economists had forecast a 14.5% increase.
On a month-to-month basis, the 20-city composite index rose 1.6% from March.
Economists polled by Reuters had been expecting a 1.7% increase.
Among the twenty cities, Phoenix, San Diego, and Seattle reported the highest year-over-year gains in April.
"While the acceleration may be met with concerns, mortgage interest rates remain 50% lower than they were in 2005, when home price growth last peaked, keeping the ratio of mortgage payments to monthly households income lower today," Selma Hepp, CoreLogic Deputy Chief Economist said.
"It's probably that continued massive demand will keep pressure on prices, which are likely to remain at double-digit growth rate throughout the remainder of 2021."
Similar data out Tuesday from the U.S. Federal Housing Finance Agency showed its home price index gained a record-high 15.7% through the 12 months ended in April.
Home prices have surged nationwide in large part due to limited supply.
Contrary to the run-up to the 2007-2009 financial crisis, the current boom does not feature a frenzy of speculators and buyers with low credit scores buying homes and trying to flip them.
Prices are at a record while sales volumes are still roughly 20% below their peak level in mid-2005.
"Despite sharply rising prices, demand for homes remains very strong," Zillow Economist Matthew Speakman said.
"Bidding wars for the relatively few houses available remain common and homes are going under contract at an increasingly fast pace."
"Inventory upticks in recent weeks suggest that a respite from these red-hot market conditions may be starting to form."
Last week, the Commerce Department reported that sales of new U.S. single-family homes fell to a one-year low in May as expensive raw materials such as lumber continue to increase prices of newly constructed houses.
Also, the National Association of Realtors said sales of previously owned homes fell for a fourth consecutive month in May.
Reporting by Evan Sully; Editing by Chizu Nomiyama
https://www.reuters.com/business/us-hom ... 021-06-29/
"U.S. home prices rose in April at fastest pace in 15 years - S&P/Case-Shiller"
Evan Sully
June 29, 2021
June 29 (Reuters) - U.S. single-family home prices in 20 key urban markets rose in April from a year earlier by the most in over 15 years as the shortage of homes available to buy drives up prices at the fastest rate seen since before the financial crisis, a closely watched survey said on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 14.9% through the 12 months ended in April, the largest annual price increase since December 2005.
A Reuters poll of economists had forecast a 14.5% increase.
On a month-to-month basis, the 20-city composite index rose 1.6% from March.
Economists polled by Reuters had been expecting a 1.7% increase.
Among the twenty cities, Phoenix, San Diego, and Seattle reported the highest year-over-year gains in April.
"While the acceleration may be met with concerns, mortgage interest rates remain 50% lower than they were in 2005, when home price growth last peaked, keeping the ratio of mortgage payments to monthly households income lower today," Selma Hepp, CoreLogic Deputy Chief Economist said.
"It's probably that continued massive demand will keep pressure on prices, which are likely to remain at double-digit growth rate throughout the remainder of 2021."
Similar data out Tuesday from the U.S. Federal Housing Finance Agency showed its home price index gained a record-high 15.7% through the 12 months ended in April.
Home prices have surged nationwide in large part due to limited supply.
Contrary to the run-up to the 2007-2009 financial crisis, the current boom does not feature a frenzy of speculators and buyers with low credit scores buying homes and trying to flip them.
Prices are at a record while sales volumes are still roughly 20% below their peak level in mid-2005.
"Despite sharply rising prices, demand for homes remains very strong," Zillow Economist Matthew Speakman said.
"Bidding wars for the relatively few houses available remain common and homes are going under contract at an increasingly fast pace."
"Inventory upticks in recent weeks suggest that a respite from these red-hot market conditions may be starting to form."
Last week, the Commerce Department reported that sales of new U.S. single-family homes fell to a one-year low in May as expensive raw materials such as lumber continue to increase prices of newly constructed houses.
Also, the National Association of Realtors said sales of previously owned homes fell for a fourth consecutive month in May.
Reporting by Evan Sully; Editing by Chizu Nomiyama
https://www.reuters.com/business/us-hom ... 021-06-29/
Re: THE HOUSING MARKET
CNBC
"Lumber prices dive more than 40% in June, biggest monthly drop on record"
Yun Li @YUNLI626
PUBLISHED WED, JUN 30 2021
KEY POINTS
* Lumber futures tanked more than 40% in June alone, suffering their worst month on record dating back to 1978.
* The building commodity is down more than 18% in 2021, headed for the first negative first half since 2015.
* The quick reversal of lumber’s monthslong rally came as Americans started to go on vacations again instead of taking on renovation and building projects.
* Many who are fearful of persistent inflation also took comfort in the drastic decline in prices in the face of cooling demand.
The great lumber bubble of 2021 has popped.
After a jaw-dropping rally this spring, lumber prices have come back down to earth as supply increased, speculative trading action cooled and homebuilding demand eased.
Lumber futures tanked more than 40% in June alone, suffering their worst month on record dating back to 1978.
The building commodity is down more than 18% in 2021, headed for the first negative first half since 2015.
At their peak on May 7, lumber prices hit an all-time high of $1,670.50 per thousand board feet on a closing basis, which was more than six times higher than their pandemic low in April 2020.
The quick reversal of lumber’s monthslong rally came as Americans started to go on vacations again amid the economic reopening instead of taking on renovation and building projects.
Many who are fearful of persistent inflation also took comfort in the drastic decline in prices in the face of cooling demand.
“This drop suggests that the cause of that inflation — the mismatch of supply and demand — will not last forever,” said Brad McMillan, CIO at Commonwealth Financial Network.
“As suppliers across industries get their acts together, those shortages will fade, along with the inflation."
"That looks to be happening for lumber now and will happen for other inputs later.”
Goldman Sachs analysts said Tuesday that their channel checks suggested increasing consumer hesitancy around some home improvement projects given sticker shock from the rapid rise in certain commodity prices this year, notably lumber.
Earlier this year, lumber prices exploded due to a combination of reduced supply amid mill shutdowns and surging demand for new and improved homes.
At one point, the lumber shortage led to the average price of a new single-family home increasing by nearly $36,000, according to the National Association of Home Builders.
The red-hot housing market also saw a record shortage of existing homes available.
In April, about 1 in 4 homes for sale were newly built, the highest share ever.
Historically new homes make up about 1 in 10.
Recently, there have been signs of the housing boom fizzling.
Weekly mortgage demand fell 6.9% last week to the lowest level in almost a year and a half.
Now, lumber futures prices are on track for their sixth consecutive weekly loss, wiping out all of their 2021 rally.
The price fell another 6% on Wednesday to around $710 per thousand board feet.
“It was a bubble but it is still double where it was pre Covid,” said Peter Boockvar, CIO at Bleakley Advisory Group.
Still, Boockvar believes just because the lumber bubble might have burst, it doesn’t mean the threat of inflation isn’t real.
The investor pointed to the CRB raw industrials index, which is at a 10-year high right now.
The index tracks materials that don’t trade on a futures exchange and thus better reflect actual supply and demand and not the behavior of speculators.
https://www.cnbc.com/2021/06/30/lumber- ... ecord.html
"Lumber prices dive more than 40% in June, biggest monthly drop on record"
Yun Li @YUNLI626
PUBLISHED WED, JUN 30 2021
KEY POINTS
* Lumber futures tanked more than 40% in June alone, suffering their worst month on record dating back to 1978.
* The building commodity is down more than 18% in 2021, headed for the first negative first half since 2015.
* The quick reversal of lumber’s monthslong rally came as Americans started to go on vacations again instead of taking on renovation and building projects.
* Many who are fearful of persistent inflation also took comfort in the drastic decline in prices in the face of cooling demand.
The great lumber bubble of 2021 has popped.
After a jaw-dropping rally this spring, lumber prices have come back down to earth as supply increased, speculative trading action cooled and homebuilding demand eased.
Lumber futures tanked more than 40% in June alone, suffering their worst month on record dating back to 1978.
The building commodity is down more than 18% in 2021, headed for the first negative first half since 2015.
At their peak on May 7, lumber prices hit an all-time high of $1,670.50 per thousand board feet on a closing basis, which was more than six times higher than their pandemic low in April 2020.
The quick reversal of lumber’s monthslong rally came as Americans started to go on vacations again amid the economic reopening instead of taking on renovation and building projects.
Many who are fearful of persistent inflation also took comfort in the drastic decline in prices in the face of cooling demand.
“This drop suggests that the cause of that inflation — the mismatch of supply and demand — will not last forever,” said Brad McMillan, CIO at Commonwealth Financial Network.
“As suppliers across industries get their acts together, those shortages will fade, along with the inflation."
"That looks to be happening for lumber now and will happen for other inputs later.”
Goldman Sachs analysts said Tuesday that their channel checks suggested increasing consumer hesitancy around some home improvement projects given sticker shock from the rapid rise in certain commodity prices this year, notably lumber.
Earlier this year, lumber prices exploded due to a combination of reduced supply amid mill shutdowns and surging demand for new and improved homes.
At one point, the lumber shortage led to the average price of a new single-family home increasing by nearly $36,000, according to the National Association of Home Builders.
The red-hot housing market also saw a record shortage of existing homes available.
In April, about 1 in 4 homes for sale were newly built, the highest share ever.
Historically new homes make up about 1 in 10.
Recently, there have been signs of the housing boom fizzling.
Weekly mortgage demand fell 6.9% last week to the lowest level in almost a year and a half.
Now, lumber futures prices are on track for their sixth consecutive weekly loss, wiping out all of their 2021 rally.
The price fell another 6% on Wednesday to around $710 per thousand board feet.
“It was a bubble but it is still double where it was pre Covid,” said Peter Boockvar, CIO at Bleakley Advisory Group.
Still, Boockvar believes just because the lumber bubble might have burst, it doesn’t mean the threat of inflation isn’t real.
The investor pointed to the CRB raw industrials index, which is at a 10-year high right now.
The index tracks materials that don’t trade on a futures exchange and thus better reflect actual supply and demand and not the behavior of speculators.
https://www.cnbc.com/2021/06/30/lumber- ... ecord.html
Re: THE HOUSING MARKET
REUTERS
"U.S. private payrolls increase solidly; pending home sales rebound"
By Lucia Mutikani
JUNE 30, 2021
WASHINGTON (Reuters) - U.S. private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy, though a shortage of willing workers continues to hang over the labor market recovery.
The ADP National Employment Report on Wednesday showed hiring in the leisure and hospitality sector accounting for nearly half of the increase in private payrolls this month.
Manufacturing payrolls growth slowed, likely reflecting labor shortages as well as scarce raw materials.
A global shortage of semiconductors is hampering production of motor vehicles and some household appliances.
“The labor market is continuing to heal,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
“Job growth is expected to pick up on a broader reopening, but timing is uncertain given it is unclear how quickly supply constraints will ease.”
Private payrolls increased by 692,000 jobs in June.
Data for May was revised lower to show 886,000 jobs added instead of the initially reported 978,000.
Economists polled by Reuters had forecast private payrolls would increase by 600,000 jobs.
More than 150 million Americans have been fully vaccinated against COVID-19, allowing authorities to remove pandemic-related restrictions on businesses and mask mandates for the inoculated.
Employment gains in June were evenly spread among small, medium and large companies, indicating that the economy’s recovery from the pandemic was broadening in scope.
Leisure and hospitality payrolls increased by 332,000 jobs and there were solid gains in education and health services.
Factories added only 19,000 jobs, below the monthly average 43,000 jobs in the past three months.
Hiring at construction sites increased by 47,000 jobs.
The sector is being underpinned by strong demand for housing, thanks to historically low mortgage rates and a shift to home offices during the pandemic.
A separate report from the National Association of Realtors on Wednesday showed contracts to buy previously owned homes rebounded 8% in May.
But the housing market is grappling with a severe shortages of homes for sale, which is driving up prices well beyond the reach of some first-time buyers.
Applications for loans to buy a home fell last week, the Mortgage Bankers Association said in another report.
Home purchase loans were down 17.3% compared to same period last year.
“We expect record high home prices and scarce inventories of existing homes for sale will continue to weigh on home sales,” said Nancy Vanden Houten, lead economist at Oxford Economics in New York.
Stocks on Wall Street were mixed.
The dollar gained versus a basket of currencies.
U.S. Treasury prices rose.
LABOR CRUNCH
The ADP report is jointly developed with Moody’s Analytics and was published ahead of the Labor Department’s more comprehensive and closely watched employment report for June on Friday.
But it has a poor track record predicting the private payrolls count from the Bureau of Labor Statistics because of methodology differences.
The ADP report has in recent months overestimated the private payroll gains reflected in the BLS data after understating that growth through much of the jobs recovery, which started in May 2020.
“It remains difficult to use the ADP data to accurately predict the BLS data,” said Daniel Silver, an economist at JPMorgan in New York.
According to a Reuters survey of economists, private payrolls likely increased by 600,000 jobs in June after rising 492,000 in May.
With government hiring expected to have increased by about 100,000, that would lead to overall payrolls advancing by 700,000 jobs in June.
The economy created 559,000 jobs in May.
A shortage of willing workers is frustrating efforts to ramp up hiring.
There were a record 9.3 million job openings as of April.
The precise cause of the labor crunch is a matter of fierce - often political - debate.
Economists generally point to several factors, among them the unusually generous unemployment benefits, including a weekly $300 subsidy from the federal government, that were part of the Biden administration’s pandemic relief package.
A lack of child care facilities as some centers which shut during the pandemic never reopened, is also keeping some parents home, and there is also indication that some workers remain worried about the health risks of returning to work.
At least 26 states mostly led by Republican governors are terminating federal government-funded unemployment benefits before the Sept. 6 expiration date.
No evidence has emerged so far that the early terminations, which started on June 12 and will run through July 31, are pulling the unemployed into jobs, although the rolls of those receiving benefits is shrinking faster in those states.
A survey by job search engine Indeed here found that while the vast majority of unemployed indicated they would like to start looking for work in the next three months, many did not express a sense of urgency.
It showed rising vaccinations, shrinking savings and the opening of schools in the fall will be key catalysts.
About 9.3 million people are officially classified as unemployed.
Job growth could, however, surprise on the upside this month.
The Conference Board’s survey of consumers showed households extremely upbeat in their views of the labor market.
The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, surged in June to the highest level since 2000.
Reporting By Lucia Mutikani; additional reporting by Evan Sully; Editing by Dan Burns and Andrea Ricci
https://www.reuters.com/article/us-usa- ... SKCN2E61FP
"U.S. private payrolls increase solidly; pending home sales rebound"
By Lucia Mutikani
JUNE 30, 2021
WASHINGTON (Reuters) - U.S. private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy, though a shortage of willing workers continues to hang over the labor market recovery.
The ADP National Employment Report on Wednesday showed hiring in the leisure and hospitality sector accounting for nearly half of the increase in private payrolls this month.
Manufacturing payrolls growth slowed, likely reflecting labor shortages as well as scarce raw materials.
A global shortage of semiconductors is hampering production of motor vehicles and some household appliances.
“The labor market is continuing to heal,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics in White Plains, New York.
“Job growth is expected to pick up on a broader reopening, but timing is uncertain given it is unclear how quickly supply constraints will ease.”
Private payrolls increased by 692,000 jobs in June.
Data for May was revised lower to show 886,000 jobs added instead of the initially reported 978,000.
Economists polled by Reuters had forecast private payrolls would increase by 600,000 jobs.
More than 150 million Americans have been fully vaccinated against COVID-19, allowing authorities to remove pandemic-related restrictions on businesses and mask mandates for the inoculated.
Employment gains in June were evenly spread among small, medium and large companies, indicating that the economy’s recovery from the pandemic was broadening in scope.
Leisure and hospitality payrolls increased by 332,000 jobs and there were solid gains in education and health services.
Factories added only 19,000 jobs, below the monthly average 43,000 jobs in the past three months.
Hiring at construction sites increased by 47,000 jobs.
The sector is being underpinned by strong demand for housing, thanks to historically low mortgage rates and a shift to home offices during the pandemic.
A separate report from the National Association of Realtors on Wednesday showed contracts to buy previously owned homes rebounded 8% in May.
But the housing market is grappling with a severe shortages of homes for sale, which is driving up prices well beyond the reach of some first-time buyers.
Applications for loans to buy a home fell last week, the Mortgage Bankers Association said in another report.
Home purchase loans were down 17.3% compared to same period last year.
“We expect record high home prices and scarce inventories of existing homes for sale will continue to weigh on home sales,” said Nancy Vanden Houten, lead economist at Oxford Economics in New York.
Stocks on Wall Street were mixed.
The dollar gained versus a basket of currencies.
U.S. Treasury prices rose.
LABOR CRUNCH
The ADP report is jointly developed with Moody’s Analytics and was published ahead of the Labor Department’s more comprehensive and closely watched employment report for June on Friday.
But it has a poor track record predicting the private payrolls count from the Bureau of Labor Statistics because of methodology differences.
The ADP report has in recent months overestimated the private payroll gains reflected in the BLS data after understating that growth through much of the jobs recovery, which started in May 2020.
“It remains difficult to use the ADP data to accurately predict the BLS data,” said Daniel Silver, an economist at JPMorgan in New York.
According to a Reuters survey of economists, private payrolls likely increased by 600,000 jobs in June after rising 492,000 in May.
With government hiring expected to have increased by about 100,000, that would lead to overall payrolls advancing by 700,000 jobs in June.
The economy created 559,000 jobs in May.
A shortage of willing workers is frustrating efforts to ramp up hiring.
There were a record 9.3 million job openings as of April.
The precise cause of the labor crunch is a matter of fierce - often political - debate.
Economists generally point to several factors, among them the unusually generous unemployment benefits, including a weekly $300 subsidy from the federal government, that were part of the Biden administration’s pandemic relief package.
A lack of child care facilities as some centers which shut during the pandemic never reopened, is also keeping some parents home, and there is also indication that some workers remain worried about the health risks of returning to work.
At least 26 states mostly led by Republican governors are terminating federal government-funded unemployment benefits before the Sept. 6 expiration date.
No evidence has emerged so far that the early terminations, which started on June 12 and will run through July 31, are pulling the unemployed into jobs, although the rolls of those receiving benefits is shrinking faster in those states.
A survey by job search engine Indeed here found that while the vast majority of unemployed indicated they would like to start looking for work in the next three months, many did not express a sense of urgency.
It showed rising vaccinations, shrinking savings and the opening of schools in the fall will be key catalysts.
About 9.3 million people are officially classified as unemployed.
Job growth could, however, surprise on the upside this month.
The Conference Board’s survey of consumers showed households extremely upbeat in their views of the labor market.
The survey’s so-called labor market differential, derived from data on respondents’ views on whether jobs are plentiful or hard to get, surged in June to the highest level since 2000.
Reporting By Lucia Mutikani; additional reporting by Evan Sully; Editing by Dan Burns and Andrea Ricci
https://www.reuters.com/article/us-usa- ... SKCN2E61FP
Re: THE HOUSING MARKET
REUTERS
"U.S. mortgage application volumes at lowest since early 2020 -MBA"
By Evan Sully
JULY 7, 2021
(Reuters) - The number of applications for home mortgages decreased last week to the lowest level since early 2020, dampened by declines in refinancing activity and purchase applications.
The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index fell 1.8% in the week ending on July 2 from a week earlier, leaving it at to the lowest level since January 2020.
This reflected a 2.3% decrease in applications to refinance existing loans and a 1.1% drop in applications to purchase a home.
The average contract interest rate for traditional 30-year mortgages decreased to 3.15% last week from 3.20% the prior week.
“The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
“Refinance applications have trended lower than 2020 levels for the past four months.”
Rising home prices combined with insufficient supply has continued to weigh on the housing market.
Reporting by Evan Sully; Editing by Sandra Maler
https://www.reuters.com/article/usa-eco ... SL2N2OJ1T3
"U.S. mortgage application volumes at lowest since early 2020 -MBA"
By Evan Sully
JULY 7, 2021
(Reuters) - The number of applications for home mortgages decreased last week to the lowest level since early 2020, dampened by declines in refinancing activity and purchase applications.
The Mortgage Bankers Association (MBA) said on Wednesday its seasonally adjusted market index fell 1.8% in the week ending on July 2 from a week earlier, leaving it at to the lowest level since January 2020.
This reflected a 2.3% decrease in applications to refinance existing loans and a 1.1% drop in applications to purchase a home.
The average contract interest rate for traditional 30-year mortgages decreased to 3.15% last week from 3.20% the prior week.
“The 30-year fixed rate was 11 basis points lower than the same week a year ago, but many borrowers previously refinanced at even lower rates,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.
“Refinance applications have trended lower than 2020 levels for the past four months.”
Rising home prices combined with insufficient supply has continued to weigh on the housing market.
Reporting by Evan Sully; Editing by Sandra Maler
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