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Why America’s Housing Market Has Never Been Weirder

Derek Thompson at The Atlantic attempts to answer the big question on many of our minds right now.  Why is the U.S. housing market behaving so very, very strangely these days?

He discusses the usual suspects like low rates, low inventory, and aging Millenials.  They, of course, are all playing a part.  But there is something else going on as well. And thy name is COVID-19.

– Presently the rich are the biggest beneficiaries of this current situation.  Thompson notes that “…a lot of middle- and high-income households took advantage of the pandemic to accelerate their plans to buy first homes, second homes, and vacation homes.”  This meant they were looking for bigger homes outside of cities which caused much of the urban flight that we have seen.

– Cities, presently, are the biggest losers.  Thompson writes that “the pandemic took a sledgehammer to urban amenities, and downtown rents fell.”  But things are about to change.

Here we go again?  In 2008, rising home prices and falling rents was the clearest sign something was amiss and eventually lead to the crash of the housing market.

Have no fear.  Rising homeownership in the mid-aughts was a result of lax lending standards which is nothing like what we are seeing in today’s market.

So what does that mean for the future.  Thompson actually has some good news there, especially for Millenials, “The last decade has punished Millennials with a Great Recession, a slow recovery, and a housing shortage. But the next decade could see Generation Z moving into cities that offer great bargains for young residents, even as they benefit from a booming economy, full employment, and a surge in housing construction.”

READ MORE @ THE ATLANTIC

March 5, 2021, 1:54 pmby Tyler Cralle
The Blog

Bye-Bye Scotch Tariffs

I give credit where credit is due, so I would like thank the Biden administration for suspending retaliatory tariffs against Britain on Scotch whisky. (New York Times)

The tariff suspension is expected to help several types of British exporters, especially the Scotch whisky industry. In October 2019,a 25 percent tariff was placed on Scotch whisky and exports to the United States have since dropped 35 percent, costing companies more than £500 million (about $700 million), the industry’s trade group said. Cashmere and Stilton cheese producers will also benefit, the government said.New York Times
March 5, 2021, 11:16 amby Tyler Cralle
The Blog

Economy Adds 379k Jobs

Job hiring exploded in February, surprising many economists with big gains in the hospitality industry according to the Labor Department on Friday.  Temporary layoffs fell big time, but unfortunately the long-term unemployed aren’t seeing much help.   (BLS)

–  Total nonfarm payroll employment rose by 379,000

– The unemployment rate fell 10 basis points to 6.2%

The labor force participation rate remained at 61.4% in February and the number of persons not in the labor force who currently want a job was
essentially unchanged at 6.9 million and is  1.9 million more than last year

– Temporary layoff fell by 517,000 to 2.2 million. This is 1.5 million more than a year earlier but is down considerably from the high of 18.0 million in April 2020.

– The number of permanent job losers, at 3.5 million, was essentially unchanged in February but is 2.2 million higher than a year earlier.

The industries with the biggest gains were leisure and hospitality (+355,000), health care and social assistance(+46,000), and retail (+41,000)

Meanwhile, the industries with the biggest declines were in local and state government (-69,000), construction (-61,000), and mining (-8,000)

NOTE: Telework dropped to 22.7% from 23.3% in January

March 5, 2021, 9:08 amby Tyler Cralle
The Blog

NEWSLETTER: Mortgage Rates Climb Over 3%

Friday’s newsletter is out! Today we discuss mortgage rates climb above 3%, Realtor.com finds that home prices jumped & listings fell in February, and jobless claims rose slightly

Read the latest issue

March 5, 2021, 7:36 amby Tyler Cralle
The Blog

Good Morning, World!

☕️ Happy Friday! We are 12 Days from St. Patrick’s Day & 30 Days from Easter

📉 U.S. stock futures fell this morning, pointing to another day of losses for major indexes as investors awaited the monthly jobs report for fresh insights into the health of the labor market.

☀️ Sunrise Stories:

 Senate votes to open debate on $1.9 trillion coronavirus relief bill (Washington Post)

Optimism about economic recovery has triggered a selloff in U.S. Treasurys that is pushing fixed-income investors to run for cover in some unlikely havens (Wall Street Journal)

More bad news for Cuomo as new evidence suggests Cuomo aides rewrote nursing home report to hide higher death toll (New York Times)

March 5, 2021, 6:28 amby Tyler Cralle
The Blog

Home Prices Jump & Listings Plummet in February

Realtor.com released its monthly housing report that shows the red hot housing market stayed the course in February (Realtor.com)

–  The median national home listing price was $353,000 in February.  The 13.7% appreciation was actually down from the 15.4% we saw in January.

– The inventory of homes for sale decreased by 48.6% compared to the same time last year.  This was actually a higher rate of decline compared to January when the inventory fell 42.6%.

Even with rising prices, homes sat on the market for fewer days than they did last year.  The typical home spent 70 days on the market this February, which is 11 days less than last year.

March 4, 2021, 4:33 pmby Tyler Cralle
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