Eye On Housing
Author Archives
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Federal Reserve Raises by 75 Basis Points and Notes Slowing Economy
Continuing its tightening of financial conditions to bring the rate of inflation lower, the Federal Reserve’s monetary policy committee raised the federal funds target rate by 75 basis points, increasing that target to an upper bound of 2.5%. This move matches the June rate hike as the largest increase for the funds rate since 1994. While committing to a policy… Read More ›
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Single-Family Starts Fall to Two-Year Low on Higher Construction Costs and Interest Rates
Increased interest rates, building material supply chain bottlenecks and elevated construction costs continue to put a damper on the single-family housing market. For the first time since June 2020, both single-family starts and permits fell below a one million annual pace. Overall housing starts fell 2.0% to a seasonally adjusted annual rate of 1.56 million units in June from an… Read More ›
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Builder Confidence Plunges as Affordability Woes Mount
Builder confidence plunged in July as high inflation and increased interest rates stalled the housing market by dramatically slowing sales and buyer traffic. In a further sign of a weakening housing market, builder confidence in the market for newly built single-family homes posted its seventh straight monthly decline in July, falling 12 points to 55, according to the National Association… Read More ›
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Construction Job Openings Leveling Off
The construction labor market remains tight, but the total number of open construction sector jobs has likely reached a cyclical peak as economic activity slows in response to tighter financial conditions. The count of open construction jobs was little changed in May, falling from 440,000 in April to 434,000. The April reading remains the highest measure in the history of… Read More ›
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New Home Sales Increase in May Before Fed’s June Rate Rise
After posting four consecutive monthly declines on rising mortgage rates and worsening affordability conditions, new home sales posted a solid gain in May as some buyers rushed into the market in advance of the Federal Reserve’s June interest rate hike. Sales of newly built, single-family homes in May increased 10.7% to a 696,000 seasonally adjusted annual rate from an upwardly… Read More ›
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Housing Starts Slow in May
Single-family starts declined further in May, as higher interest rates weighed on housing affordability. This follows a sixth straight monthly decline for the NAHB/Wells Fargo HMI. Additionally, the cost and availability of materials, lumber, labor and lots remain key supply-side headwinds. Single-family permits decreased 5.5% to a 1.05 million unit rate in May. Despite declines for housing affordability, a lack… Read More ›
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Federal Reserve Accelerates Rate Hikes
To fight persistent inflation, the Federal Reserve has committed to significantly cooling demand. This approach reflects a non-monetary policy failure to fix underlying supply-side challenges that are pushing up inflation. The Fed lacks policy tools to make these supply-side fixes, so it must rely on demand-side impacts to bring down inflation by reducing economic growth. Consequently, at the conclusion of… Read More ›
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Weakening Builder Confidence Points to Economic Troubles Ahead
Rising inflation and higher mortgage rates are slowing traffic of prospective home buyers and putting a damper on builder sentiment. In a troubling sign for the housing market, builder confidence in the market for newly built single-family homes posted its sixth straight monthly decline in June, falling two points to 67, according to the National Association of Home Builders (NAHB)/Wells… Read More ›
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Construction Job Openings Jump
The construction labor market remains tight, as the industry sees a rising number of job openings year-over-year. The count of open construction jobs jumped to 449,000 unfilled positions in April. This is the highest measure in the history of the data series (going back to late 2000). The housing market remains underbuilt and requires additional labor, lots and lumber and… Read More ›
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Condo Construction Market Showing Gains?
According to NAHB analysis of quarterly Census data, the count of multifamily, for-sale housing starts increased during the first quarter of 2022. At 11,000 units started, this was the best quarter for condo construction since the third quarter of 2008. As a result, the market share of rental units of multifamily construction starts decreased to 91% during the first quarter… Read More ›