More Jobs News
Last month we spoke about the data that will be coming out before the Federal Reserve Board meets towards the end of September. These economic reports included jobs, inflation, the quarterly reading on economic growth and more. The August job numbers released just before the Labor Day weekend was expected to be one of the major determinants contributing to the decision by the Fed — along with unexpected events that might come up. Certainly, the massive stormed named as Harvey has been a major example of such an unexpected event.
Until now, most analysts were betting that the September Fed announcement would include an October start to the Fed’s previously announced program of paring down mortgage and government bonds. While the markets are dreading such a plan, because it could potentially raise long-term interest rates — the paring down is expected to be gradual. In addition, the Fed is not expected to raise short-term rates in September, but leave open the possibility of such a move before the end of the year.
Did the numbers released strengthen these assessments, or could there be another course for the Fed? The increase in jobs of 156,000 was seen as disappointing, especially when coupled with the downward revision of the numbers for the previous two months. The unemployment rate moved up slightly to 4.4% and wage inflation continued to be tame. The bottom line? Along with the devastating effects of the storm, this further decreases chances for a rate hike this month, but may not deter the Fed from starting to pare down their assets.
Median home prices in the second quarter eclipsed a record high set in 2016, jumping 6.2 percent year over year as the inventory crunch continues to push property values higher, according to the National Association of Realtors®. The national median price for an existing single-family home was $255,600, up from $240,700—the previous high—in the second quarter of 2016, NAR reported. Prices for single-family homes rose in 87 percent of U.S. housing markets; 23 metros saw double-digit increases. “The 2.2 million net new jobs created over the past year generated significant interest in purchasing a home in what was an extremely competitive spring buying season,” says NAR chief economist Lawrence Yun. “Listings typically flew off the market in under a month—and even quicker in the affordable price ranges—in several parts of the country. With new supply not even coming close to keeping pace, price appreciation remained swift in most markets.” Yun continues to urge for more new-home construction to meet the demand in the housing market. Source: NARBaby boomers are expected to sell their homes in large numbers over the next decade. Arthur C. Nelson, a University of Arizona professor, predicts the “great senior sell-off” will occur in the mid to late 2020s. It’s a few years later than what Nelson had originally predicted in 2013 (he originally said by 2020). He says baby boomers are living in their homes longer, holding off on selling in the hopes of netting an even higher price later on. Indeed, homeowners are holding onto their properties significantly longer than they used to—now about nine to 10 years. With ample housing shortages across the country, they are having a tough time finding a replacement home—but they may also be waiting to recover even more in value from what they may have lost in the Great Recession, Nelson notes. “It’s not that boomers are going to ‘age in place,’” says Nelson. “They’re going to be stuck in place, and they’re going to make the best of it.” He says that those who can afford it will opt to remodel. But Nelson says it may not be easy for boomers to sell their homes. Millennials—who are largely expected to be the buyers of boomers’ homes—have differing tastes, with more opting to live in central cities or in the oldest, closest suburbs, or they’re showing preferences for smaller homes and not sprawling McMansions in the exurbs. Nelson says the surrounding cities likely will be the toughest for boomers to sell their homes in. Source: The Atlantic CityLab
A dearth of suitable land for residential development is posing a big challenge for the real estate market. The 2017 REALTORS® Land Institute (RLI) survey shows that the overall number of land transactions over the past year for residential use is up, clocking in at 25 percent of the total. Prices are rising, too. The survey shows a 5 percent increase in total dollar volume of closed residential land transactions compared to the previous year. Prices are rising, too. The survey shows a 5 percent increase in total dollar volume of closed residential land transactions compared to the previous year. “One challenge will be finding enough affordable land on the outskirts of populated areas,” says Jessa Friedrich, marketing manager for RLI, who recently blogged about the upswing in residential land transactions for RLI. “On the other hand, all of this is great news for current landowners and land real estate investors looking to sell, as well as those who serve them in those markets.” RLI expects this trend won’t wane in the coming year, either. “The lack of housing inventory across the country and the demand for residential land for new-home construction will continue to drive up land prices through 2018,” Friedrich says. Source: REALTOR® Magazine