Shut up and be happy

Posted on October 5, 2024 by grim

From WalletHub:

Happiest States in America (2024)

Happiness comes from a combination of internal and external factors. We can influence it somewhat by approaching situations positively or choosing to spend time with people we love, doing activities we enjoy. However, other things out of our control, like the cost-of-living crisis or the stress of being in an election year – and they have taken a toll, with only 47% of Americans saying they are “very satisfied” with their lives.

New Jersey

New Jersey is the third-happiest state, with the lowest share of people reporting traumatic events during their childhood and the second-highest life satisfaction rate. The state also has the second-lowest depression rate and the second-highest share of people who have supportive relationships and love in their lives. All these factors come together to create the conditions for good mental health.

Residents of New Jersey also demonstrate their happiness in their marriages. The Garden State has the third-lowest separation and divorce rate in the country, at around 17%.

Finally, when it comes to finances, New Jersey has the third-highest share of households earning over $75,000 per year. It also has the sixth-lowest food insecurity rate, which shows that the state is making progress when it comes to addressing poverty. Plus, New Jersey has the ninth-lowest share of people who get anxious when thinking about their personal finances.

Posted in Crisis, Humor, Where's the Beef? | 5 Comments

Jobs Day!

Posted on October 4, 2024 by grim

From CNBC:

Here’s everything to expect when the September jobs report is released Friday

September’s jobs picture is expected to look a lot like August’s — a gradual slowdown in hiring from earlier this year, a modest increase in wages and a labor market that is looking a lot like many policymakers had hoped it would.

Nonfarm payrolls are projected to show growth of 150,000, from 142,000 the month before, with a steady unemployment rate of 4.2%, according to the Dow Jones consensus. On the wage side, the forecast is for a 0.3% monthly gain and a 3.8% increase from a year ago — the annual rate being the same as August.

Should the numbers come in as expected, they would hit close to a sweet spot allowing the Federal Reserve to continue to lower interest rates without a sense of urgency that it could be behind the curve and at risk of causing a recession.

“The jobs market is slowing down and becoming less tight,” said Katie Nixon, chief investment officer at Northern Trust Wealth Management. “The balance of power has shifted back to employers and away from employees, and that certainly will alleviate the wage pressure, which has been a key component of inflation. We’ve been team soft-landing for a while, and this is exactly what a soft landing looks like.”

Of course, there’s always the possibility of a substantial upside or downside surprise to the numbers. 
…
The Bureau of Labor Statistics will release the report at 8:30 a.m. While there will still be one more nonfarm payrolls count before the presidential vote next month, the October report is expected to be distorted by the dock workers’ strike as well as Hurricane Helene — making September the last “clean” report before Election Day.

Posted in Demographics, Economics, Employment, National Real Estate | 89 Comments

NJ’s warehouse craze over?

Posted on October 3, 2024 by grim

From NJ Spotlight News:

Warehouse vacancies rise, fueling claims of an overbuilt market

Warehouse vacancies in New Jersey are on the rise, as supply outpaces demand and community groups continue to fight the explosive growth in new construction.

The vacancy rate for warehouses and other kinds of industrial real estate in northern and central New Jersey rose to 5.3% in the second quarter of 2024 from 4.8% in the first quarter and 2.5% in the second quarter of 2022, according to data from Newmark, a real estate company that monitors the market.

Those numbers are more than twice as high as they were two years ago, leaving more than 36 million square feet of industrial space available in north and central Jersey. The figure rises to almost 53 million vacant square feet when the survey adds space that is available for sublease by tenants who are looking to downsize or reduce the amount of space they occupy.

Newmark called the increased vacancy rate a “substantial shift,” and attributed it to a slowdown in leasing activity and an increase in the delivery of available properties in 2023. Despite the higher vacancy rate, asking rents rose to a record-high $17.01 per square foot, an increase of 9.5% over the previous year, reflecting an increase in the construction of top-class industrial space.

One example of the warehouse construction boom is seen in Hamilton Township, Mercer County, where at least nine industrial spaces totaling more than 850,000 square feet were available for lease on Sept.20, according to commercialsearch.com, a website for commercial real estate. At least three of the properties were built in 2023 or later.
…
The new data fuels claims that the warehouse market is overbuilt, and that developers are continuing to construct the giant buildings, some of which are built before tenants have committed to occupation, regardless of market demand, and despite strong opposition in some communities.

Tim Brill of the New Jersey Conservation Foundation, a critic of the rising presence of warehouses in the state, said the apparent oversupply is primarily driven by too many warehouses being built speculatively, but that supply keeps being added even though some new buildings remain empty.

“This is a way overbuilt market,” he said.

Posted in Economics, New Development, New Jersey Real Estate | 74 Comments

So much for NJ’s economy

Posted on September 30, 2024 by grim

From Reuters:

US East Coast port strike looms Tuesday with no talks scheduled

U.S. East and Gulf Coast port workers are set to go on strike at midnight on Monday with no talks currently scheduled to head off a stoppage threatening to halt container traffic from Maine to Texas and cost the economy as much as $5 billion a day.

The labor contract between the International Longshoremen’s Association (ILA) union representing 45,000 port workers and the United States Maritime Alliance (USMX) employer group expires late Monday, with negotiations at an impasse over pay.

A port strike will go ahead starting Tuesday at 12:01 a.m. ET, the ILA said on Sunday. The USMX “refuses to address a half-century of wage subjugation,” the union said in a statement on Sunday.

If union members do walk off the job, it would be the first coast-wide ILA strike since 1977, affecting ports that handle about half of the nation’s ocean shipping.

No negotiations are taking place and none are planned before the Monday deadline, a person familiar with the matter said on condition of anonymity as the matter is a sensitive one.

But a strike could stop the flow of everything from food to automobiles at major ports, potentially jeopardizing jobs and stoking inflation weeks ahead of the U.S. presidential election.

Business Roundtable, which represents major U.S. business leaders, said it was “deeply concerned about the potential strike at the East Coast and Gulf Coast ports.”

The group warned a labor stoppage could cost the economy billions of dollars daily, hurting businesses, workers and consumers across the country. “We urge both sides to come to an agreement before Monday night’s deadline.”

A short strike could have a limited economic impact given many companies have imported extra goods ahead of a possible work stoppage or shifted more shipments to West Coast ports. But a strike that continues for weeks could have serious economic impacts.

“These people today don’t know what a strike is,” Harold Daggett, the ILA’s fiery leader, said in a recent video post. “I’ll cripple you. I will cripple you.”

Posted in Crisis, Economics, New Jersey Real Estate, Politics, Unrest | 195 Comments

Northeast takes a dip

Posted on September 28, 2024 by grim

From the NAR:

Pending Home Sales Edged Up 0.6% in August

Pending home sales in August rose 0.6%, according to the National Association of REALTORS®. The Midwest, South and West posted monthly gains in transactions, while the Northeast recorded a loss. Year-over-year, the West registered growth, but the Northeast, Midwest and South declined.

The Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on contract signings – increased to 70.6 in August. Year over year, pending transactions were down 3.0%. An index of 100 is equal to the level of contract activity in 2001.

“A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August,” said NAR Chief Economist Lawrence Yun. “However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.”

The Northeast PHSI diminished 4.6% from last month to 61.6, a drop of 2.2% from August 2023. The Midwest index intensified 3.2% to 70.0 in August, down 3.6% from one year ago.

The South PHSI grew 0.1% to 83.6 in August, receding 5.3% from the prior year. The West index increased 3.2% in August to 58.0, up 2.7% from August 2023.

“In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months,” Yun said. “Contract signings rose in both the most affordable and most expensive regions – the Midwest and West, respectively – because mortgage rates have fallen nationally. Housing affordability will continue to see notable improvements.” 
“The Federal Reserve does not directly control mortgage rates, but the anticipation of more short-term interest rate cuts has pushed long-term mortgage rates down to near 6% in late September,” added Yun. “On a typical $300,000 mortgage, that translates to approximately $300 per month in mortgage payment savings compared to a few months ago.”

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 62 Comments

First timers vs. Investors

Posted on September 26, 2024 by grim

From HousingWire:

Investors are purchasing fewer homes, but they still account for nearly 25% of sales

The share of single-family homes sold to investors peaked at nearly 30% at the start of this year, but these types of transactions dropped significantly in the ensuing six months, according to a CoreLogic report released Wednesday.

Investor purchases began to decline in March 2024 and by June represented 23.4% of all U.S. home sales. That was the lowest share in two years, CoreLogic economist Thomas Malone noted in the report. But investor activity is still higher than it was prior to the COVID-19 pandemic, when their purchase share bounced between 15% to 20%.

”The decline since March is sharp, but it is not clear that it will last,” Malone wrote. ”This drop could just be a seasonal movement that comes from (consumer) buyers being more active during the summer months. Whether the slump persists will be determined by whether buyers remain active this fall when interest rates are anticipated to drop.”

CoreLogic reported that the number of investor home purchases in June 2024 had been slashed to 80,000. That was down from 112,000 in June 2023 and nearly half of the peak rate of 149,000 purchases in June 2021, when mortgage rates bottomed out below 3%.

Real estate investors have been accused of driving up home prices across the country. A report released in May by theGovernment Accountability Office concluded while that large institutional investors like Blackstone Group and Invitation Homes may have influenced the rise in prices since the Great Recession, is it more difficult to assess whether they actually reduced homeownership opportunities.

CoreLogic added to this conclusion by noting that ”investors bring additional demand to the market, but not additional supply, so they impact prices.” But outside of a 12-month window in 2021 and 2022 where investor purchases and sale prices surged in tandem, ”the two variables don’t seem to move together.”

In July, Senate Democrats — led by Amy Klobuchar of Minnesota and Sherrod Brown of Ohio — introduced legislation that would require large corporations and private equity firms to report bulk purchases of single-family homes to the Federal Trade Commission (FTC) and the Department of Justice (DOJ) for antitrust review.

Lawmakers said at the time that the bill, which remains in the committee stage, would “stop anticompetitive transactions that could increase rents, decrease services, and push homebuyers out of the market.”

But institutional investors maintain a small presence in the context of the housing market at large, CoreLogic reported. Across the 20 largest U.S. metro areas, so-called ”mega investors,” or those that own at least 1,000 homes, represent about 1% of all purchases. Corporations that own at least 100 homes account for another 2%, while small investors who own fewer than 10 homes have a market share of 18%.

CoreLogic also separated home sales into three price buckets and found that investors accounted for 29% of all purchases in the least expensive tier — i.e., starter homes. They represented 22% of all sales in the mid-priced tier and 21% of all sales in the most expensive tier.

Posted in Crisis, Demographics, Economics, Housing Bubble, National Real Estate | 125 Comments

Time to spend!

Posted on September 25, 2024 by grim

From CNBC:

Mortgage rates dip, giving U.S. homebuyers over $200,000 in additional spending power in some U.S. cities

U.S. home buyers are gaining tens of thousands in purchasing power as mortgage rates drop.

With 30-year fixed mortgage rates declining from 7.79% in October 2023 to 6.2% last week, home buyers in the 100 largest U.S. cities have gained a median of $70,000 in additional buying power for the same $2,100 monthly payment, according to a Realtor.com analysis.

In other words, a U.S. buyer can now afford a home $70,000 more expensive than what they were planning to purchase last year.

The findings are based on the monthly payment for a median-priced home in the U.S., a 20% down payment and a 6.2% mortgage rate. The analysis applied the same method to each of the 100 largest cities, calculating how much extra buying power homebuyers have in each local market compared with last year.

Perhaps unsurprisingly, buyers in cities with the most expensive homes saw their spending power increase the most. In San Jose, California, for example, buyers can now afford a home worth $1.6 million for the same monthly payment they could get a $1.4 million home a year ago, according to Realtor.com.

Those savings will likely grow, too. With the Federal Reserve cutting its benchmark federal funds rate by 50 basis points last week, mortgage rates are forecasted to decline to 6% or less at some point in 2025.

If that happens, additional buying power for homebuyers in the 100 largest metro areas would increase to $84,800 for a median-priced home, compared with October 2023, according to the analysis.

Posted in Demographics, Economics, Housing Bubble, Mortgages | 79 Comments

Back to “normal”?

Posted on September 23, 2024 by grim

From the AP:

For home shoppers, the Fed’s big rate cut is likely just a small step towards affording a home

The Federal Reserve gave home shoppers what they hoped for this week: a big rate cut and a signal of more cuts to come. 

Even so, aspiring homebuyers and homeowners eager to refinance should temper their expectations of a big drop in mortgage rates from here.

While the Fed doesn’t set mortgage rates, its policy pivot does clear a path for mortgage rates to go lower. But in this case, the Fed’s action was widely anticipated, so rates moved lower well before the cut was even announced. 

“We’ve seen the bulk of the easing that we’re going to get already this year,” said Danielle Hale, chief economist at Realtor.com. “I wouldn’t be entirely surprised if mortgage rates ticked up a bit from here before declining again.”

When mortgage rates rise, they can add hundreds of dollars a month in costs for borrowers. The average rate on a 30-year mortgage rose from below 3% in September 2021 to a 23-year high of 7.8% last October. That coincided with the Fed jacking up its benchmark interest rate to fight inflation.

Rates have been mostly declining since July in anticipation of a Fed rate cut. The average rate on a 30-year mortgage is now 6.09%, according to mortgage buyer Freddie Mac. That’s down from 7.22% in May, its peak so far this year. 
…
While lower rates give home shoppers more purchasing power, a mortgage around 6% is still not low enough for many Americans struggling to afford a home. That’s mostly because home prices have soared 49% over the past five years, roughly double the growth in wages. They remain near record highs, propped up by a shortage of homes in many markets. 

Posted in Demographics, Economics, Employment, Housing Bubble, Mortgages, National Real Estate | 97 Comments

NJ loses jobs in August

Posted on September 21, 2024 by grim

From ROINJ:

New Jersey payrolls decline in August; unemployment rate at 4.8% 

New Jersey recorded a decrease of 4,400 jobs between July and August, bringing the seasonally adjusted total to 4,369,400 jobs, according to Thursday estimates released by the U.S. Bureau of Labor Statistics.

The state’s unemployment rate ticked up by a tenth of a percentage point, to 4.8% in August.

In August, gains in the private sector were seen in four out of nine private industries. Sectors that recorded job gains include education and health services (+1,000), manufacturing (+900), financial activities (+900) and leisure and hospitality (+200).

Sectors that recorded employment losses included professional and business services (-2,700), construction (-1,600), trade, transportation and utilities (-500), other services (-400) and information (-200). Public-sector jobs decreased by 2,000 for August, mostly at the local level.

Over the past 12 months, New Jersey has added 49,600 nonfarm jobs. About 86% of those gains were in the private sector, with four out of nine private sector industries recording a gain between August 2023 and August.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 18 Comments

Fed unexpectedly cuts by 50

Posted on September 19, 2024 by grim

From CNBC:

Fed slashes interest rates by a half point, an aggressive start to its first easing campaign in four years

The Federal Reserve on Wednesday enacted its first interest rate cut since the early days of the Covid pandemic, slicing half a percentage point off benchmark rates in an effort to head off a slowdown in the labor market.

With both the jobs picture and inflation softening, the central bank’s Federal Open Market Committee chose to lower its key overnight borrowing rate by a half percentage point, or 50 basis points, affirming market expectations that had recently shifted from an outlook for a cut half that size.

Outside of the emergency rate reductions during Covid, the last time the FOMC cut by half a point was in 2008 during the global financial crisis.

The decision lowers the federal funds rate to a range between 4.75%-5%. While the rate sets short-term borrowing costs for banks, it spills over into multiple consumer products such as mortgages, auto loans and credit cards.

In addition to this reduction, the committee indicated through its “dot plot” the equivalent of 50 more basis points of cuts by the end of the year, close to market pricing. The matrix of individual officials’ expectations pointed to another full percentage point in cuts by the end of 2025 and a half point in 2026. In all, the dot plot shows the benchmark rate coming down about 2 percentage points beyond Wednesday’s move.

“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the post-meeting statement said.

The decision to ease came “in light of progress on inflation and the balance of risks.” Notably, the FOMC vote was 11-1, with Governor Michelle Bowman preferring a quarter-point move. Bowman’s dissent was the first by a Fed governor since 2005, though a number of regional presidents have cast “no” votes during the period.

“We’re trying to achieve a situation where we restore price stability without the kind of painful increase in unemployment that has come sometimes with this inflation. That’s what we’re trying to do, and I think you could take today’s action as a sign of our strong commitment to achieve that goal,” Chair Jerome Powell said at a news conference following the decision.

Posted in Economics, Employment, Mortgages, National Real Estate | 208 Comments

August heats up

Posted on September 18, 2024 by grim

From Redfin:

U.S. Home Prices Rose 0.5% in August, the Biggest Increase in 4 Months

U.S. home prices grew 0.5% in August on a seasonally adjusted basis, the largest month-over-month increase since April.  On a year-over-year basis, home prices rose 6.7%, the lowest annual increase since January. 

This is according to the Redfin Home Price Index (RHPI), which uses the repeat-sales pricing method to calculate seasonally adjusted changes in prices of single-family homes. The RHPI measures sale prices of homes that sold during a given period, and how those prices have changed since the last time those same homes sold. It’s similar to the S&P CoreLogic Case-Shiller Home Price Indices but is published more than one month earlier. August data covers the three months ending August 31, 2024. Read the full RHPI methodology here.

Home prices continue to rise in part because there aren’t enough homes for sale.  Housing supply is up 16.7% from a year ago, but is still down almost 30% from pre-pandemic levels. 

“Prices kept creeping up during this unusually slow summer for home sales as mortgage rates came down and supply remained stubbornly low,” said Redfin Senior Economist Sheharyar Bokhari. “If mortgage rates fall further this fall—and we expect they will—price growth will likely pick up as more prospective homebuyers come off the sidelines .”

Mortgage affordability could improve as soon as tomorrow, depending on how much the Federal Reserve cuts interest rates. 

Twenty (40%) of the 50 most populous U.S. metro areas recorded a seasonally adjusted drop in home prices in August, month over month. 

The biggest decline in August was in San Antonio, TX (-2.4%), followed by Warren, MI (-0.9%) and Oakland, CA (-0.7%). The highest month over month gains were recorded in Philadelphia (1.5%), Detroit (1.3%), and Providence, RI (1.2%).

Posted in Economics, Housing Bubble, National Real Estate | 127 Comments

Starter home? What’s that?

Posted on September 17, 2024 by grim

From CBS News:

As more first-time homebuyers are priced out, what can revive the American starter home?

Felicia Ellis is actively looking to buy her first home by the end of the year. A three-bedroom, two-bathroom house on a tree-lined street in Houston seemed like it could be a perfect fit. 

But the starter home Ellis desperately wants seems to be priced like a forever home she can’t afford. Someone else put in an offer, and it was accepted.

“[It was] the one that got away,” Ellis said.

Ellis says she has a good job earning around $70,000, but her student loans have made her debt-to-income ratio a turnoff for lenders. She’s previously been approved for a $200,000 loan, which falls more than $150,000 short of the homes she’s been looking at in an area with good schools for her young daughter. Currently Ellis and her daughter share a room in an apartment Ellis rents with her sister. 

Five years ago, one in three American families could afford a starter home in 63 of America’s largest 100 cities, CBS News found. Now, it’s down to just 10 cities.
…
This housing crisis is at least a decade in the making, according to Chris Vincent, vice president of government relations and advocacy for Habitat for Humanity. The nonprofit, one of America’s largest builders of starter homes, now focuses on advocacy as much as building.

“A lot of this is from the tailwinds, even from the ’08 financial crisis,” Vincent said. “We’ve essentially not been building enough homes for the last decade to keep up with demand.”

In Silver Spring, Maryland, Carolyn Hipkins got lucky. She was making $54,000 a year when she bought a starter home rehabbed by Habitat for Humanity. The sale price was $360,000 with a 0% mortgage. 

“I was so happy when I got that call on the phone. I had to control myself because I wanted to scream,” Hipkins said.

Habitat for Humanity doesn’t just build single family homes anymore, either. They’re the ninth largest builder of starter homes in the U.S., offering condos and apartments to a range of incomes. One in six families now spend more than half of their income on housing, according to the organization. Vincent says they’re advocating for access to credit and land in “communities of opportunity.”

The housing shortage is also a key economic issue for American voters ahead of the Nov. 5 election. 

Vice President Kamala Harris has proposed providing $25,000 in down payment assistance for Americans who have paid their rent on time for two years. She has also proposed building 3 million affordable new homes and rentals by the end of her first term, offering tax incentives for developers who build starter homes, and a $40 billion fund to help local governments find solutions to the shortage. 

Former President Donald Trump has proposed making federal land available to help with housing supply, but his campaign hasn’t offered any further details.

Posted in Crisis, Demographics, Economics, Housing Bubble, National Real Estate, New Development | 103 Comments

Where can you afford to buy?

Posted on September 16, 2024 by grim

From NorthJersey.com:

These New Jersey towns have the lowest home prices within 30 minutes of New York City

In a new study from PropertyShark, the real estate data provider found the 13 communities with the lowest home prices within a half-hour drive of lower Manhattan. Each of these locations had median home prices that were less than the metro area’s median sale price of $441 per square foot.

Of the 13 communities, 10 are in North Jersey.

Newark was named the most affordable location. With a median home size of 2,010 square feet, this Essex County city has a median price of $228 per square foot.

The Hudson County city of Bayonne has the second lowest home prices on the list. Also with a median home size of 2,010 square feet, homes have a median price of $286 per square foot.

Six other Hudson County communities made this list: Guttenberg, Kearny, Secaucus, Union City, North Bergen and West New York. The other two North Jersey locations are in Bergen County: Lyndhurst and Rutherford.

The other New York metropolitan areas on the list are The Bronx, Union County and Staten Island.

Other North Jersey communities in the metropolitan area that have the lowest home prices in the region — though not necessarily within 30 minutes of the city — include Wantage, Hardyston, Vernon, Sparta, Wanaque, West Milford, Hopatcong and Ringwood.

Posted in Demographics, Economics, Employment, Housing Bubble, New Jersey Real Estate, NYC | 49 Comments

Ah damn, now they’ve gone and done it

Posted on September 13, 2024 by grim

From MSN:

Home prices almost never go down

Beginning in the 70s and into the 80s, baby boomers who were coming of age and entering the housing world fueled a boom, so home prices generally rose (as did mortgage rates). An economic downturn began in 1990, but it was pretty mild; unemployment peaked in 1992 and home prices were already beginning to rise again.

Then there was the Great Financial Crisis, the big bad wolf. From the end of 1991 up until what would become the early aughts of the crisis, you can see home prices rising. It’s a slow burn at first, but by the early 2000s, home prices are leaping. In 2004 and 2005, values were seeing double-digit increases. But of course that all came to an end, because as housing was becoming more and more unaffordable, lending was crazy. “There was no money down and liar loans,” as “Poison Ivy” Zelman once told me. Zelman was one of the only analysts to call the housing crash in 2006 as it was developing and before it turned into the financial crisis. 

Home prices nosedived and didn’t really begin to recover until 2012. Even so, given the severity of the crash, which saw multiple large lenders filing for bankruptcy and millions of homes foreclosed on, you might have thought it would be worse.

“By my count, there have been just seven down years for the U.S. housing market over the past 75 years,” Ben Carlson, author of A Wealth of Common Sense, a well-recognized blog on all things wealth and finance, wrote recently on why housing is everyone’s favorite investment. “That’s losses just 9% of the time. And five of those seven years occurred after the housing bubble popped.”

More than a decade later, here we are. Home prices have only gone up since—exponentially so during the pandemic. Interestingly enough, in this latest cycle, mortgage rates soared in a small echo of the 1980s, and home sales plummeted, similar to the financial crisis. But home prices haven’t really fallen. The latest reading showed home prices rose 5.4% in June from a year earlier, another all-time high, despite showing signs of slowing. 

Either way, it doesn’t seem as though home prices will fall anytime soon, even if they’re no longer rising as rapidly as they had during the pandemic. Housing policy analysts, urban economists, regular economists, and even some real estate executives will mostly tell you why with one single reason: there aren’t enough homes. The deficit of homes in this country didn’t happen all of a sudden. It’s the result of years of underbuilding, and in some places, decades of policy failure that made it almost impossible to build anything but single-family homes, thanks to zoning and land-use regulation all controlled by localities. That was all happening before the pandemic housing boom, which only worsened things and helped. Housing crises that had been somewhat contained to coastal, blue states spread. 

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 175 Comments

Vampire squid says prices are going up

Posted on September 11, 2024 by grim

From Goldman Sachs:

US house prices are forecast to rise more than 4% next year

US home prices are expected to climb as the Federal Reserve begins cutting interest rates while the underlying economy is still firm, according to Goldman Sachs Research.

Our analysts increased their forecast for US home price appreciation to 4.5% this year and 4.4% in 2025, up from previous estimates of 4.2% and 3.2% respectively in April.

We spoke with Goldman Sachs Research analyst Vinay Viswanathan about the revised outlook and why homes might become more affordable even as prices continue to climb.

Your team recently upped its forecast for US home prices, noting that “bad news is likely good news” for home prices. What did you mean by that?

It’s a reflection of the fact that labor markets appear to be loosening, which gives the Fed more room to cut. Our economists now forecast the Fed will deliver three consecutive 25 basis point rate cuts at the remaining meetings this year.

Now, if we thought the ability of homebuyers to purchase houses would diminish because of a worsening economy, in which people lose jobs and income and are therefore unable to afford a mortgage, rising prices would be bad news.

Posted in Demographics, Economics, Employment, Housing Bubble, National Real Estate | 71 Comments