Latest Posts.
Housing Affordability Challenges Homeownership as Mortgage Interest Rates and Home Prices Rise
Housing affordability is on the decline. The required monthly mortgage payment (principal & interest) to purchase a median-priced existing-home has more than doubled from January 2020 to June 2023.
This is a consequence of a 330+ bps increase in mortgage interest rates and a 50%+ increase in the median price of an existing for-sale home over that period.
Resilience Amid Uncertainty: The Surprising Strength of the U.S. Labor Market as Indicated by JOLTS and ADP Private Payrolls Reports
Despite economic uncertainties, the U.S. labor market is showing signs of surprising durability. Data from the JOLTS survey and the ADP private payrolls report reveal strong job growth and moderated wage pressures, suggesting a robust labor market that acts as a shock absorber against potential economic risks.
Mortgage Bankers Association (MBA) Weekly Mortgage Applications Survey, Week ending May 26, 2023
According to the recent Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey, mortgage applications saw a 3.7% decrease in the week ending May 26, 2023. This decline comes amidst higher mortgage rates and a lack of available homes on the market.
Featured Posts.
Tech Layoffs Have Spiked Since the Federal Reserve Began Raising Interest Rates (Interactive Visualization)
After a period of aggressive hiring during the pandemic, tech giants are experiencing a significant reversal, with nearly 200,000 layoffs since the start of 2022, including from major firms like Alphabet, Amazon, and Meta. The tech layoffs partially reflect regrets over overzealous expansion and misjudging the longevity of pandemic-induced growth in online services.
Worthy Reads: Week Ending May 26th, 2023
The Wall Street Journal reports that the return to the office has stalled, with many companies delaying their plans for employees to return to in-person work due to ongoing uncertainties surrounding the COVID-19 pandemic. The article discusses how shifting timelines and evolving health guidelines have led to a cautious approach from employers, impacting office occupancy rates and the recovery of downtown business districts.
Source: The Wall Street Journal, Peter Grant
Bloomberg discusses changing recession predictions, providing hope for advocates of a soft landing for the economy. Economists are revising their forecasts as inflation pressures ease and global supply chain disruptions show signs of improvement. While concerns about potential recessions still exist, the article highlights the possibility of a more gradual economic slowdown instead of a sharp downturn.
Source: Bloomberg, Enda Curran
Slate explores the trend of converting office buildings into housing in downtown areas, using Twitter’s headquarters as an example. The article discusses the potential benefits of repurposing underutilized office spaces into residential units, addressing the housing shortage and revitalizing city centers. It examines the challenges and opportunities associated with such conversions, including zoning regulations, infrastructure needs, and the impact on local communities.
Source: Henry Grabar
An article on Medium examines automated valuation models (AVMs) in commercial real estate (CRE). AVMs, which use algorithms and data analytics to estimate property values, are gaining popularity in the CRE industry. The article discusses the benefits of AVMs, such as efficiency and cost-effectiveness, as well as potential challenges and limitations in accurately valuing complex commercial properties.
Source: Meir Rosilio
NPR reports on the impact of remote work on commercial real estate, particularly office spaces. The article discusses how the rise of remote work during the pandemic has raised questions about the future of office demand. It explores the potential long-term changes in work habits and the implications for commercial property owners, developers, and city planning. The article highlights the need for adaptability and innovation in the commercial real estate sector.
Source: NPR, Arezou Rezvani
Indicator Spotlight.
News from Around the Web.
U.S. New Residential Construction Trends: Housing Permits, Starts, and Completions for April 2023
The U.S. Census Bureau and the Department of Housing and Urban Development’s new residential construction data for April 2023 reveals critical insights into the current state of the housing market.
A Recap of this Week’s Consumer Price Index (CPI) and Producer Price Index (PPI) Releases and What it Means for Inflation Trends
Two vital economic indicators were released this week—the Consumer Price Index (CPI) and Producer Price Index (PPI). By examining the latest data provided by the Bureau of Labor Statistics, we summarize the reports and inflation trends.
Zillow Housing Market Trends April 2023: Buyer Demand, New Listings, and Their Impact on Home Prices
Explore key insights from Zillow’s April 2023 housing market report, covering buyer demand, new listings, and how these factors are affecting home prices and the rental market.
A Resilient Labor Market Amid Economic Uncertainties: April Non-Farm Payrolls and Wages Rise, Unemployment Falls
The Department of Labor’s recent release indicates a resilient labor market with non-farm payrolls increasing by 253,000, steady unemployment rates, and hourly earnings growth. Learn more about the health of the labor market and the broader economy.
Realtor’s April 2023 Housing Market Trends Report: Listings Increase, Median List Price Growth Slows, Days on Market Expand Significantly
Realtor.com’s April 2023 Monthly Housing Market Trends Report highlights the continuing challenges faced by the housing market, as affordability headwinds persist. Active listings increased, but pending listings declined, and median home list prices experienced slower growth.
U.S. Labor Market Trends: Jobless Claims Rise, Unemployment Cools Gradually
Recent data reveals an increase in US initial jobless claims and a decrease in continuing jobless claims, highlighting the labor market’s resilience amidst economic challenges.
Full Transcript of Federal Reserve Post-Meeting Press conference
Quick summary and the full transcript from Jerome Powell’s (Federal Reserve Chairman) press conference following the Federal Open Market Committee meeting. The FOMC made the decision to hike interest rates yet again to 500-525, a 25 basis point increase. Jerome Powell hints at a pause, but leaves the door open for more interest rate increases.
Labor Market Trends: A Closer Look at Job Openings and the JOLTS Survey for March 2023
According to the Job Openings and Labor Turnover Survey (JOLTS) in March the number of job openings in the US decreased to 9.6 million on the last business day of March 2023, down by 384,000 from the previous month. This figure is 1.6 million lower than that of December. The job openings rate was 5.8% in March, down by 1.0 percentage point since December.
Manufacturing Sector Contracts in April, Yet Shows Signs of Improvement
The manufacturing sector experienced contraction for the sixth consecutive month in April, according to the latest Manufacturing ISM® Report On Business®. Despite this, the Manufacturing PMI® registered an increase compared to March, indicating a slower contraction rate.
March 2023 Sees a Slight Increase in Construction Spending
Construction spending in March 2023 showed a small increase of 0.3% compared to February, with a total of $1,834.7 billion. The growth is attributed to both private and public construction sectors.
