Discussing the reasons to own a home, home prices increased and are projected to keep growing, good news about job openings, CEO outlook for the economy decreases, the service sector continues to grow plus more
Reasons to Buy a Home
Before we dive into today’s news, a quick reminder of the top reasons to own a home:
Pretty compelling reasons BUT this does not mean that it always makes sense for everybody to buy a home. My suggestion is to do some some serious thinking about your lifestyle, credit and finances. Then if you decide you do want to buy a home, talk to some mortgage lenders about your options and how much money you will need for down payment and closing costs.
US Home Prices Increase 6.9%
Home prices increased nationally by 6.9 percent year over year from April 2017 to April 2018. On a month-over-month basis, prices increased by 1.2 percent in April 2018 compared with March 2018 according to the CoreLogic HPI.
Looking ahead, the CoreLogic HPI Forecast indicates that the national home-price index is projected to continue to increase by 5.3 percent on a year-over-year basis from April 2018 to April 2019.
Good news but remember that this does not reflect what is happening in every local real estate market. In Anderson County SC, home prices increased by 4.3% in April 2018 compared to April 2017 according to the data in the WUAR MLS.
Dr. Frank Nothaft, chief economist for CoreLogic, said:
The best antidote for rising home prices is additional supply. New construction has failed to keep up with and meet new housing growth or replace existing inventory. More construction of for-sale and rental housing will alleviate housing cost pressures.
Nothaft hits the nail on the head about how more inventory would help to slow the pace of increasing home prices.
More Job Openings Than Job Seekers
For the first time on record, the number of American job openings exceeds the number of job seekers – providing the latest indicator of continued job growth and economic strength under President Donald J. Trump.
The Job Openings and Labor Turnover Survey (JOLTS) issued today by the U.S. Department of Labor’s Bureau of Labor Statistics (BLS) showed a record 6.7 million available jobs in the United States during the month of April. Previously released BLS data showed 6.3 million job seekers in April and 6.1 million job seekers during the month of May.
U.S. Secretary of Labor Alexander Acosta said:
Never before have we had an economy where the number of open jobs exceeds the number of job seekers. This Administration is committed to ensuring that all Americans have the necessary skills to access good, family-sustaining jobs. With the lowest unemployment rate in over 18 years and 3.4 million jobs created since President Trump’s election, this is a great time be a job seeker in the United States.
Good news! And the NAHB just said that the count of unfilled jobs in the construction sector was effectively unchanged in April, remaining near post-Great Recession high levels.
CEO Economic Outlook Index Eases
From the Business Roundtable:
Following a record-high CEO outlook in the first quarter of 2018, the results of the Business Roundtable second quarter CEO Economic Outlook Survey released today show strong CEO plans for the coming months, but a modest decline in the overall economic outlook — amid increased uncertainty surrounding government policies, particularly the direction of U.S. trade policy.
The Q2 2018 CEO Economic Outlook Index — a composite of CEO expectations for sales and plans for capital spending and hiring over the next six months — fell to 111.1 in the second quarter of 2018, declining 7.5 points from 118.6 in the first quarter. While this is the first time the Index has declined in nearly two years, the Index remains well above its historical average of 81.2 for the sixth straight quarter. This signals a continued positive direction for the U.S. economy despite modest declines in all three components of the Index. The new survey also shows a CEO projection of 2.7 percent U.S. GDP growth in 2018, a small decrease from the 2.8 percent projection last quarter.
Not quite as good news as the previous tidbit from the DOL.
Joshua Bolten, Business Roundtable President & CEO, sadi:
We continue to see strong CEO plans in the second quarter of 2018, but uncertainties about trade policy are a growing weight on economic progress – especially amid escalating trade tensions. America’s current and future economic vitality depends on productive talks with China and a successful modernization of NAFTA.
Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. and Chairman of Business Roundtable said:
For the sixth straight quarter, business leaders are expressing historically strong optimism about our economy — and that’s delivering more jobs and increased wages to millions of Americans. To sustain this momentum, we need to ensure that we have competitive trade policies in place to provide the certainty necessary to deliver sustainable economic growth to create more opportunities for workers and families nationwide.
Interesting that both Dimon and Bolten mention trade policy. I am sure many people are concerned with what could happen because of the tariffs hurting the economy.
Service Sector Growth Continues
From the ISM:
Economic activity in the non-manufacturing sector grew in May for the 100th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM® Report On Business®.
While this is good news, some of the comments from respondents mention the negative impact of the tariffs on metals. I am not sure how consumers paying more will help the economy…
Home Prices Projected to Rise Faster Than Inflation
An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.
The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.
That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.
While rising home prices are good news, prices rising faster than inflation and wages is not sustainable. Once again, we hear that the shortage of affordable homes is the reason why.
Criminal Probe Into Trading in Fannie and Freddie Bonds
The U.S. has opened a criminal investigation into whether traders manipulated prices in the $550 billion market for unsecured bonds issued by Fannie Mae and Freddie Mac, according to people familiar with the matter.
The probe, parts of which were described by four people familiar with it, shows that investigations by the Obama Justice Department into market manipulation by bank traders are continuing under President Donald Trump. The Obama administration secured billions of dollars in settlements and criminal charges tied to the rigging of currency markets and benchmark interest rates.
Another investigation but the DOJ did not respond for a comment. We will just have to wait and see if anything happens with this and who is being investigated.
Well that is it for today! As always if you have any questions about selling a home in the Anderson SC area, Contact Me!