When Boeing announced on Monday that it would halt production of its troubled 737 Max in January, it raised the prospect that the economy could take a hit in early 2020. But Tuesday's announcement of stronger-than-expected housing starts could ease some of those concerns. The Commerce Department reported that November housing starts rose by 3.2% in ... READ MORE >
Is the next mortgage bubble imminent? Not so fast, the debt data tells us
Residential mortgages totaled $9.4 trillion as of June 30 and overall consumer debt reached an all-time high of $13.86 trillion, according to the Federal Reserve Bank of New York. Residential mortgage debt eclipsed the 2008 peak of $9.29 trillion, fueling the belief among some market watchers that a housing crash apocalypse they’ve been counting on since the ... READ MORE >
Low treasury rate is a boost for home builders, neutral for commercial real estate
Bonds have been declining in recent weeks following a 25-basis-point rate cut from the Federal Reserve and expectations of further cuts amid rising concerns over an impending recession. Recession concerns were underscored Wednesday by the inversion of the U.S. and U.K. two- and 10-year yield curves and the fall of 30-year Treasury yields to 2.07%, a record ... READ MORE >
Homebuilder confidence indicators rise but still lag 2018
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 >