Real estate housing and economic news round up for March 17 2017…
In case you missed yesterday’s post:
Nationwide housing starts rose 3% in February from an upwardly revised January reading to a seasonally adjusted annual rate of 1.288 million units, according to newly released data from HUD and the Commerce Department.
Single-family production increased 6.5% to 872,000 units — its highest reading in nearly a decade — while multifamily starts fell 3.7% to 416,000 units.
Great news BUT are the new homes being built in the areas and price ranges that are hurting due to a lack of affordable homes?
Thirty-nine states added construction jobs between January 2016 and January 2017 while 38 states and D.C. added construction jobs between December and January, according to an analysis by the Associated General Contractors of America of Labor Department data released today. Association officials said that many firms report they are having a hard time finding enough qualified workers to hire as they work to keep pace with growing demand.
These are not just construction jobs in residential real estate and indicate a strengthening economy. Hopefully, this will continue BUT it is concerning that they are having a hard time finding qualified workers.
But the most interesting data point in today’s JOLTS report was the the surge in quits, the so-called “take your job and shove it indiactor”, which in January soared by 135K people voluntarily leaving their jobs, the biggest monthly increase since December 2015, which in turn pushed the total number of Americans quitting their jobs in the month to 3.22 million, a level not seen since January 2001.
This an indicator that many media outlets ignore but it is seriously good news. If people are willing to quit their job, it means they are pretty sure they can get another job easily. The increase in quits can also mean that incomes are increasing since people usually quit because they found a better paying job.
In a strange reverberation of the housing crisis, Goldman Sachs Group Inc. has become a voracious buyer of soured mortgages, trying to make money even as it looks to fulfill terms of a government settlement that calls for it to help struggling homeowners. Over the past year-and-a-half, the Wall Street giant has become the largest buyer of severely delinquent home loans from mortgage giant Fannie Mae.
Goldman Sucks is doing this because they are required to make mortgage modifications as part of the required consumer relief portion of their settlement. And I am sure that Goldman Sucks has figured out how to turn this into a profit making tax write off…
In recent years, the National Association of REALTORS® has heard concerns regarding a perceived shortage in appraisers. NAR is also aware of reports of long turnaround times for appraisals, higher and/or rush fees in certain areas, and difficulty in bringing new appraisers into the profession.
I hate that appraisers are feeling unsatisfied with their job or how much they make. Fewer appraisers could turn into a serious problem for real estate.
Industrial production was unchanged in February following a 0.1 percent decrease in January. In February, manufacturing output moved up 0.5 percent for its sixth consecutive monthly increase. Mining output jumped 2.7 percent, but the index for utilities fell 5.7 percent, as continued unseasonably warm weather further reduced demand for heating. At 104.7 percent of its 2012 average, total industrial production in February was 0.3 percent above its level of a year earlier. Capacity utilization for the industrial sector declined 0.1 percentage point in February to 75.4 percent, a rate that is 4.5 percentage points below its long-run (1972–2016) average.
Not very impressive…
From UofM Survey of Consumers:
The overall level of consumer sentiment remained quite favorable in early March due to renewed strength in current economic conditions as well as the extraordinary influence of partisanship on economic prospects. The Current Economic Conditions component reached its highest level since 2000, largely due to improved personal finances.
While current economic conditions were not affected by partisanship, this was not true for the component about future economic prospects: among Democrats, the Expectations Index at 55.3 signaled that a deep recession was imminent, while among Republicans the Index at 122.4 indicated a new era of robust economic growth was ahead.
Interesting how political preference is affecting how people are feeling about future economic prospects. I am deeply disturbed by how divided the U.S. has become…
A government watchdog has cast another cloud over a popular form of downpayment assistance used with Federal Housing Administration (FHA) loans.
In an audit published this month, the U.S. Department of Housing and Urban Development’s (HUD’s) Office of Inspector General (OIG) accused HUD officials of encouraging the rise of “questionable” downpayment programs that lock borrowers into higher interest rates.
The key thing is WHY someone needs to use a down payment assistance program…
Is it because they are not ready for the financial responsibility of home ownership?
Owning a home is a great way to build wealth…
But it can also be a great way to screw up your life if you buy before you are ready or able.