The homebuilder confidence index rose to 65 in July, according to the National Association of Homebuilders, as a dovish Federal Reserve is expected to reduce interest rates later this month and potentially two more times by the end of 2019. But while confidence has increased, homebuilders are still facing headwinds related to land, labor and tariffs, all of ... READ MORE >
Cautious builders continue to mute housing supply
Key government housing metrics continue to show year-over-year declines. Housing starts fell 11.2% in May, according to the Commerce Department, while permits declined 3.8%. These numbers strongly imply there will be a fall back toward 1.22 million housing completions on an annualized basis in the coming months. Ultimately the housing shortage is not ... READ MORE >
Tenants score win with NY rent regulations; laws could signal broader U.S. trend
On June 11, New York State lawmakers passed landmark new rent laws designed to protect the rights of tenants. Unlike existing tenant regulations, which expire on June 15, the new package of laws will be permanent. The biggest impact will be on rent-regulated apartments, which include both rent-controlled and rent-stabilized units in New York City, where ... READ MORE >
Homebuilder confidence supported by rise in housing starts
There is good news for the U.S. housing market that saw a rough end to 2018. Domestic housing starts rose 5.7 percent to 1.235 million in April, while permits grew at a more modest 0.5 percent to 1.296 million. The growth was primarily driven in the Northeast and Midwest—drying out after a wet and soggy start to the 2019 building season—with month-over-month ... READ MORE >
Key construction index shows improvement, but builder cost hurdles remain
The National Association of Homebuilders’ Housing Market Index rose 3 points to 66 in May—a seven month high—helped by lower mortgage rates and improved sales of new homes. The increase added momentum to this year’s upward trend following a low at the end of 2018. A reading above 50 indicates more builders see conditions as good than poor. While stable ... READ MORE >
Government offers further clarity in opportunity zone regulations
The U.S. Department of the Treasury released its latest set of regulatory guidelines on opportunity zones on Wednesday, offering significantly more clarity about the program, which provides tax incentives to developers entering geographic areas slated for improvement. Real estate investors appear to be getting everything they want from the program. The ... READ MORE >
Low interest rates alone can’t save the housing market
The government reported on Tuesday that December housing starts fell 11.2 percent—their lowest level in two years. Despite this, many remain hopeful of a bounce back by spring. We believe that optimism should be kept in check, as high home prices remain a drag on the market. The Commerce Department said new starts in the month slid to a seasonally ... READ MORE >
Demographics, policy to drive 2019 real estate investment
Fundamentals in the real estate market continue to be strong; however, at this late stage in the business cycle, investors need to be cautious as they venture into the development of more third-tier markets. Changes in demographics will also influence real estate as more people opt to rent, e-commerce grows and the density of offices’ increases amid an ... READ MORE >