Real estate housing and economic news round up for October 22 2016…
First-time Buyers Steer Existing-Home Sales Higher in September
Existing-home sales rose strongly in September, propelled by first-time buyer sales, reaching a 34 percent share, a high not seen in over four years.
Federal Reserve Beige Book October 19, 2016
Reports from the twelve Federal Reserve Districts suggest national economic activity continued to expand during the reporting period from late August to early October. Most Districts indicated a modest or moderate pace of expansion…
Outlooks were mostly positive, with growth expected to continue at a slight to moderate pace in several Districts.
Residential construction and real estate activity expanded further, although low home inventories continued to constrain sales in a few Districts. Home price appreciation continued at a modest pace in general, and commercial real estate activity and construction improved since the last report.
Employment expanded at a modest pace over the reporting period…
Wage growth held fairly steady at modest levels…
Read more at Federal Reserve
Jobless Claims in U.S. Rise After Falling to Four-Decade Low
Filings for U.S. unemployment benefits rose last week by the most since July, after spending several weeks at or near a four-decade low.Jobless claims increased by 13,000 to 260,000 in the period ended Oct. 15, a Labor Department report showed Thursday in Washington. The median forecast in a Bloomberg survey of economists called for 250,000. Continuing claims also rose, though the four-week average was the lowest since 2000.
The Conference Board Leading Economic Index for the U.S. Increased
The Conference Board Leading Economic Index for the U.S. increased 0.2 percent in September following a 0.2 percent decline in August, and a 0.5 percent increase in July.
Ataman Ozyildirim, Director of Business Cycles and Growth Research at The Conference Board said:
The U.S. LEI increased in September, reversing its August decline, which together with the pickup in the six-month growth rate suggests that the economy should continue expanding at a moderate pace through early 2017. Housing permits, unemployment insurance claims, and the interest rate spread were the main components lifting the index in September. Overall, the strengths among the leading indicators are outweighing modest weaknesses in stock prices and the average workweek.
Read more at The Conference Board
2.7% of All Homes That Sold in the First 7 Months of 2016 Were Purchased By Institutional Investors
Nationwide, 2.7 percent of all single family homes that sold in the first seven months of 2016 were purchased by institutional investors — entities purchasing at least 10 properties in a calendar year. That was up 29 percent from a 2.1 percent share in the first seven months of 2015 and followed two consecutive years of declines. Over the last 10 years, the peak in institutional investor share of single family purchases nationwide was 8.4 percent in the first seven months of 2008.
Total U.S. Weekly Rail Traffic Down 4.2% Compared With the Same Week Last Year
For this week, total U.S. weekly rail traffic was 531,936 carloads and intermodal units, down 4.2 percent compared with the same week last year.
Total carloads for the week ending October 15 were 262,702 carloads, down 6.1 percent compared with the same week in 2015, while U.S. weekly intermodal volume was 269,234 containers and trailers, down 2.2 percent compared to 2015.
Further Contraction in Architecture Billings Index Could Reflect Uncertainty in Economic Outlook
For the first time since the summer of 2012, the Architecture Billings Index (ABI) posted consecutive months of a decline in demand for design services. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the September ABI score was 48.4, down from the mark of 49.7 in the previous month. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 59.4, down from a reading of 61.8 the previous month.
“This recent backslide should act as a warning signal,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “But this drop-off in demand could be continued hesitancy in the marketplace to move forward on projects until the presidential election is decided. The fact that new work coming into architecture continues to slowly increase suggests that billings will resume their growth in the coming months”
Top 100 Real Estate Influencers on Social Media
I have been named to another list of real estate social media influencers.
Ironic as I am not the most social person…
Still, quite flattering to be included with some seriously important people.
Please check out the Top 100 Real Estate Influencers on Social Media
Higher Rates Don’t Mean the Death of Housing
Jonathan Gray, global head of real estate at Blackstone in an interview at CNBC:
Concerns about the impact of what’s expected to be higher Federal Reserve interest rates on the property market are overblown.
The housing market is definitely a bright spot in the U.S. Home building is not keeping up with demand and population growth. The result of that is you’re seeing rising rents and rising home prices. And we expect that to continue.
I would not let this convince you to wait too long as it could mean paying more as interest rates and home prices rise.
Magic 8 Ball Says: More First Time Home Buyers in 2017
Next year, more than half of all homes will be bought by first-time home buyers
Cass Freight Index Takes Another Dive Killing August’s “False Hope”
Heading into the Christmas shopping season, the Cass Freight Index shows shipments sank 0.4% for the month and are down 3.1% from shipments a year ago.
It’s difficult to make a case for a great holiday sales season or robust third quarter GDP, based not only on shipments, but also on many other factors…
Mortgages More Available than Many Think
Renters can become homeowners today if they have the following:
A credit score in the top-60th percentile (or even lower) of Americans
Three years of evidence of their income
The willingness to pay up to 42% or even more of their income for housing
A 5% down payment, especially if buying a home priced less than 15% above the median home price in a metropolitan area
We are not experts on what credit policy should be, nor advocates of whether credit should be tighter or looser. Our role is to educate business people on market conditions. We believe that mortgages are more attainable than many think.
Real Estate Economists Expect Continued Declines in Commercial Real Estate Growth Rates
Following six years of growth, commercial property transaction volume is expected to decline over the next three years to $428 billion in 2018
Housing Demand Remains on a Sustained Path of Recovery
Interesting tidbit from PulteGroup’s CEO:
With U.S. new home sales for 2016 on track to grow in excess of 10% over last year, we believe housing demand remains on a sustained path of recovery…
Growth in Remodeling Spending Projected to Peak in 2017
From the Harvard Joint Center for Housing Studies:
Strong gains in home renovation and repair spending are expected to continue into next year before tapering.
Homeowner remodeling activity continues to be encouraged by rising home values and tightening for-sale inventories in many markets across the country. Yet, a recent slowdown in the expansion of single family homebuilding and existing home sales could pull remodeling growth off its peak by the second half of 2017.
That’s it for today. Much more tomorrow as I am a day behind due to some technical snafus yesterday.