The cheapest financing in more than three years is making it easier for first-time buyers to afford a home. A tiny bit easier.
Instead of having just enough income needed to buy a median-priced starter home at current mortgage rates, they now have a small buffer, according to Lawrence Yun, chief economist of the National Association of Realtors.
In 2019’s second quarter, first-timers had 100% of the median household income to buy a home, as measured by NAR’s First-Time Homebuyer Affordability Index that crunches income, financing rates and home prices. By the third quarter, the index showed they had 105% of the income they needed.
“The low mortgage rates are clearly helping the market conditions,” Yun said in an interview with HousingWire. “Home prices consistently rising at a faster pace than people’s income growth has hurt, but because of the historically low rates, it’s providing marginal opportunities for first-time buyers.”
Lower mortgage rates compensate for higher home prices and lagging income growth because the cheaper financing lowers a buyer’s monthly payments.
The average U.S. rate for a 30-year fixed mortgage was 3.94% in 2019, according to Freddie Mac. That’s the lowest annual average since 2016 when it was 3.65%. The average for 2020 and 2021 probably will be 3.8%, the mortgage financier said in a forecast last month.
Home prices grew 3.2% in 2019, according to the forecast. That’s a slower pace than in 2018 when the growth rate was 5.1%.
However, income growth has been lethargic. The median household income was $66,043 in November, a gain of 1.9% higher than a year ago, adjusted for inflation, according to Sentier Research.
“This week’s mortgage rates were the second lowest in three years, supporting homebuyer demand and leading to higher refinancing activity,” said Sam Khater, Freddie Mac’s Chief Economist. “Borrowers who take advantage of these low rates can improve their cash flow by lowering their monthly mortgage payments, giving them more money to spend or save.”
30-year fixed-rate mortgage averaged 3.51 percent with an average 0.7 point for the week ending January 30, 2020, down from last week when it averaged 3.60 percent. A year ago at this time, the 30-year FRM averaged 4.46 percent.
15-year fixed-rate mortgage averaged 3.00 percent with an average 0.7 point, down from last week when it averaged 3.04 percent. A year ago at this time, the 15-year FRM averaged 3.89 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
What do Americans do when so few new homes are being built? Remodel, according to the latest report for Buildfax.
According to the housing data and analytics company, 2019 marked the lowest rate of mobility in the U.S. since the metric was first tracked in 1947. Only 9.8% of Americans moved last year. Though this marks a new low, it’s not terribly far off from the only 10.1% who moved between 2017 and 2018.
Buildfax’s report pointed to new construction as part of the issue. Namely, the lack thereof. While single-family housing authorizations increased 4.82% year over year in 2019, the year did not close out on a strong note. According to the report, authorizations decreased by 2.61% from November to December 2019.
“The U.S. is facing a housing shortage, in part due to the slowdown in housing construction last year. This has been felt in both large metros and smaller cities across the country,” Buildfax Managing Director Jonathan Kanarek said. “Now, even though the economy is showing strong growth and mortgage rates remain low, those who want to buy a new home are experiencing challenges with increased competition on a tight housing supply.”
Instead, the report states, people are remodeling. Buildfax reports that existing maintenance volume and spending increased 9.47% and 16.26% year over year, respectively. In the past, Buildfax has often referred to home maintenance activity as a recession indicator. As this activity increases, Buildfax asserts that recession probability lowers, and vice versa.
That said, in its December Healthy Housing Report, Buildfax states that “maintenance and remodeling increased substantially, potentially fueled by homeowners who feel unable to buy a new home and therefore invest in their existing property.”
As many economists have pointed out, U.S. homeowners have been staying put for a while now. The concept of “aging in place” is not a new one. In August of 2018, AARP revealed that almost 90% of homeowners approaching retirement want to stay in their homes as they age.
And for the most part, they are.
Last February, Freddie Macreleased a study showing that seniors born after 1931 are staying in their homes longer than previous generations. According to the report, this generation held 1.6 million houses back from the market in 2018.
“Americans are staying in their homes longer because the house they have is perfectly suitable for their family’s need,” he writes. “For more than four decades, home sizes have been getting bigger while family size has been in decline.”
The horrible housing blunder The West’s biggest economic policy mistake
Its obsession with home ownership undermines growth, fairness and public faith in capitalism
Economies can suffer both sudden crashes and chronic diseases. Housing markets in the rich world have caused both types of problem. A trillion dollars of dud mortgages blew up the financial system in 2007-08. But just as pernicious is the creeping dysfunction that housing has created over decades: vibrant cities without space to grow; ageing homeowners sitting in half-empty homes who are keen to protect their view; and a generation of young people who cannot easily afford to rent or buy and think capitalism has let them down. As our special report this week explains, much of the blame lies with warped housing policies that date back to the second world war and which are intertwined with an infatuation with home ownership. They have caused one of the rich world’s most serious and longest-running economic failures. A fresh architecture is urgently needed.
At the root of that failure is a lack of building, especially near the thriving cities in which jobs are plentiful. From Sydney to Sydenham, fiddly regulations protect an elite of existing homeowners and prevent developers from building the skyscrapers and flats that the modern economy demands. The resulting high rents and house prices make it hard for workers to move to where the most productive jobs are, and have slowed growth. Overall housing costs in America absorb 11% of gdp, up from 8% in the 1970s. If just three big cities—New York, San Francisco and San Jose—relaxed planning rules, America’s gdp could be 4% higher. That is an enormous prize.
As well as being merely inefficient, housing markets are deeply unfair. Over a period of decades, falling interest rates have compounded inadequate supply and led to a surge in prices. In America the frenzy is concentrated in thriving cities; in other rich countries average national prices have soared, especially in English-speaking countries where punting on property is a national sport. The financial crisis did not kill off the trend. In Britain inflation-adjusted house prices are roughly equal to their pre-crisis peak, while real wages are no higher. In Australia, despite recent falls, prices remain 20% higher than in 2008. In Canada they are up by half.
The soaring cost of housing has created gaping inequalities and inflamed both generational and geographical divides. In 1990 a generation of baby-boomers, with a median age of 35, owned a third of America’s real estate by value. In 2019 a similarly sized cohort of millennials, aged 31, owned just 4%. Young people’s view that housing is out of reach—unless you have rich parents—helps explain their drift towards “millennial socialism”. And homeowners of all ages who are trapped in declining places resent the windfall housing gains enjoyed in and around successful cities. In Britain areas with stagnant housing markets were more likely to vote for Brexit in 2016, even after accounting for differences in income and demography.
You might think fear and envy about housing is part of the human condition. In fact, the property pathology has its roots in a shift in public policy in the 1950s towards promoting home ownership. Since then governments have used subsidies, tax breaks and sales of public housing to encourage owner-occupation over renting. Politicians on the right have seen home ownership as a way to win votes by encouraging responsible citizenship. Those on the left see housing as a conduit for redistribution and for nudging poorer households to build wealth.
These arguments are overstated. It is hard to show whether property ownership makes better citizens. If you ignore leverage, it is usually better to own shares than to own homes. And the cult of owner-occupation has huge costs. Those who own homes often become nimbys who resist development in an effort to protect their investments. Data-crunching by The Economist suggests that the number of new houses constructed per person in the rich world has fallen by half since the 1960s. Because supply is constrained and the system is skewed towards ownership, most people feel they risk being left behind if they rent. As a result politicians focus on subsidising marginal buyers, as Britain has done in recent years. That channels cash to the middle classes and further boosts prices. And it fuels the build-up of mortgage debt that makes crises more likely.
It does not have to be this way. Not everywhere is afflicted with every part of the housing curse. Tokyo has no property shortage; between 2013 and 2017 it put up 728,000 dwellings—more than England did—without destroying quality of life. The number of rough sleepers has dropped by 80% in the past 20 years. Switzerland gives local governments fiscal incentives to allow housing development—one reason why there is almost twice as much home-building per person as in America. New Zealand recoups some of homeowners’ windfall gains through land and property taxes based on valuations that are frequently updated.
Most important, in a few places the rate of home ownership is low and no one bats an eyelid. It is just 50% in Germany, which has a rental sector that encourages long-term tenancies and provides clear and enforceable rights for renters. With ample supply and few tax breaks or subsidies for owner-occupiers, home ownership is far less alluring and the political clout of nimbys is muted. Despite strong recent growth in some cities, Germany’s real house prices are, on average, no higher than they were in 1980.
A home run
Is it possible to escape the home-ownership fetish? Few governments today can ignore the anger over housing shortages and intergenerational unfairness. Some have responded with bad ideas like rent controls or even more mortgage subsidies. Yet there has been some progress. America has capped its tax break for mortgage-interest payments. Britain has banned murky upfront fees from rental contracts and curbed risky mortgage lending. A fledgling yimby—“yes in my backyard”—movement has sprung up in many successful cities to promote construction. Those, like this newspaper, who want popular support for free markets to endure should hope that such movements succeed. Far from shoring up capitalism, housing policies have made the system unsafe, inefficient and unfair. Time to tear down this rotten edifice and build a new housing market that works.
The Rat is the first of all zodiac animals. According to one myth, the Jade Emperor said the order would be decided by the order in which they arrived to his party. The Rat tricked the Ox into giving him a ride. Then, just as they arrived at the finish line, Rat jumped down and landed ahead of Ox, becoming first.
The Rat is also associated with the Earthly Branch (地支—dì zhī) Zi (子) and the midnight hours. In the terms of yin and yang (阴阳—yīn yáng), the Rat is yang and represents the beginning of a new day.
In Chinese culture, rats were seen as a sign of wealth and surplus. Because of their reproduction rate, married couples also prayed to them for children.
Rats are clever, quick thinkers; successful, but content with living a quiet and peaceful life.
Recent years of the Rat are: 1924, 1936, 1948, 1960, 1972, 1984, 1996, 2008, 2020.
Paired with the Celestial Stems (天干—Tiān gān), there is a 60-year calendrical cycle. Although zi is associated with water, the years also cycle through the five elements of nature (五行—wǔ xíng).
See the table below for the full details of each year.
Personality and characteristics
Optimistic and energetic, people born in the Rat year are likable by all. They are sensitive to other’s emotions but are stubborn with your opinion. Their personality is kind, but due to weak communication skills, their words may seem impolite and rude.
On the financial side, they like saving and can be stingy. However, their love for hoarding will sometimes cause them to waste money on unnecessary things.
These Rats tend to be reliable and live a stable life. They may hold some power and are able to turn unlucky events into fortune.
These Rats encounter hardships in the early days. They become successful during their middle ages and create a happy family. However, relatives and close friends may weigh them down.
These Rats are multi-talented. They are strong-willed and always finish what they begin.
These Rats have high IQs and EQs. They are average during youth, develop well in the middle ages and have great fortune later in life.
These Rats are good speakers. They’re the mood makers of a group, but can be slightly possessive. They face difficulties in their youth, but are generally able to withstand them.
Men born in the Rat year are clever and adapt quickly to new environments. They are creative great at taking advantage of opportunities. However, they sometimes lack the courage to do so. Although they have great ideas, they might not be suitable for leadership positions.
Women born in the Rat year are the traditional women. They love keeping things organized and place great value on the family. Everything is taken care of by them and there is no need for their husband to worry. Outside of home, they’re also someone with a sense of responsibility and ability.
The Earthly Branches of Rat and Horse clash strongly. No matter what a Rat does, it won’t be enough for the Horse.
Goats are attracted to Rat’s wealth and hope to control it, making it a rocky relationship.
The Rabbit will either purposely or unintentionally go against the Rat’s wishes, while the Rat can only keep silent.
Lucky things for Rats
Colors: blue, gold, green
Numbers: 2, 3
Flowers: lily, African violet, valley lily
Directions of auspiciousness: southeast, northeast
Directions of wealth: southeast, east
Directions of love: west
Colors: yellow, brown
Numbers: 5, 9
Careers fit for Rats
Because of their independence and imagination, they are suitable for creative jobs. These include authors, editors and artists. However, if they join a team, their creative outlet may be blocked.
Rats also pay attention to fine detail. They are fit for technical work, such as engineering and architecture.
They are alert, but have a lack of courage. This makes them unsuitable as police officers, entrepreneurs or other leadership and political positions. Although Rats make good financial decisions, they should be careful not to invest with a close friend. It will not only cause money problems, but also affect the friendship.
Health and lifestyle
Since childhood, Rats have frail health. They have energetic personalities, but tire quickly. They catch colds often, but thankfully do not have serious illnesses.
They are sensitive to change in temperature. Not only is cold weather unbearable for them, they also can’t stand hot weather. But despite seeming weak and not being able to perform hard physical work, they enjoy longevity.
Rats can eat anything, whether they are delicacies or plain food. However, they should pay attention to their diet. Many times, they will get too into work and forget to eat. Going long periods without food and suddenly bingeing cause problems in their digestive system. Enemies of their health also include smoking and drinking habits.
For a healthy life, Rats must remember to eat breakfast, do moderate exercise and remain cheerful.
Rats in the Year of the Rat (2020)
Although a zodiac’s year is traditionally the most unfortunate, laden with bad omens and mishaps, 2020 will perform reasonably well for the Rat. Success will come in the form of career; celebrate the fact that your efforts will be rewarded and seen. On the other hand, your health and relationships will prove to be a struggle. Visit your doctor at the first sign of illness, and work toward creating a loving, open environment for all of your relationships. The year will have its issues, but the positive factors can turn it around.
Even though the year will be a challenge in many areas, the Rat’s career will not be among them. Success will flourish in the workplace, yielding benefits of all kinds. Hard work will be rewarded; your clever skills, quick-thinking, and optimism will drive you forward. Exclusive bonuses will come to those born in the first half of the year. Rats born in the following months will have to push a bit harder for their goals.
Finances will be booming for the entirety of the year! Your income might even double. It would do you well to save and invest your hard-earned money. Try to avoid spending it all on luxurious items and vacations. Instead, splurge on little experiences here and there. Take your family to a theme park or your husband on a dinner date. Your girlfriend might enjoy a trip to the fair.
Lucky Months: March, September, and November.
Unlucky Months: April, July, and October.
The Rat will maintain a decent academic standing in their educational studies. Hard work will be valued and necessary. With the right amount of focus on your studies, you will surely meet your goals. Be wary of your well-being; stress over your course schedule might get you down and even cause illness. Avoid sickness by pairing vitamins with at least seven to eight hours of sleep and proper nutrition. Although you might want to enjoy a full social calendar, it would be better to take some downtime to recuperate.
Vulnerable to sicknesses, like colds and fatigue, the Rat will have to be extra careful in 2020. At the first sign of symptoms, head to your general practitioner immediately. The faster you get medicine and the treatment you need, the quicker you will heal. To stay healthy, do your body a favor and eat more proteins and vegetables; boost your immune system by adding vitamins to your diet as well. As a general rule, proper diet, exercise, and sleep keep one healthy.
Luck is also not in your favor this year for love. Romance will be hard to come by for married couples and singles alike. You will face many struggles throughout the year; however, your innate positivity will help you push through hard times. If you’re single, it is best to avoid longing for a partner this year. The likelihood of finding someone long-term is very low. Instead, have fun and enjoy the freedom of not being tied down romantically. Enjoy light conversation, some partying (but not too much) and meet new people. Take this bad news and look for the bright side!
The same misfortune goes for married couples; be on the lookout for challenges in your relationship. Petty arguments, financial battles, or suspicions might plague your love-life. When these issues surface, don’t let them fester. Deal with everything head on to experience a better year. Focus on the love you have for your partner; this person is your home, your safe zone, and your beloved. Keep yourself grounded in love.
Rats will experience both successes and failures in the Year of the Rat. Success will show itself in the workplace and education, while relationships and health will be the areas that suffer. Overall, the year has a far better outlook than one’s typical zodiac year suggests. Rats should rejoice in their good fortune. Their natural ability to create success is a gift, a gift that will prove itself in financial gain. If you are feeling nervous about the year ahead, protect yourself with a Buddha statue. And have hope for good times to come amidst misfortune.
“Rates fell to the lowest level in three months and are about a quarter point above all-time lows,” said Sam Khater, Freddie Mac’s Chief Economist. “The very low rate environment has clearly had an impact on the housing market as both new construction and home sales have surged in response to the decline in rates, the rebound in the economy and improving financial market sentiment.”
30-year fixed-rate mortgage averaged 3.60 percent with an average 0.8 point for the week ending January 23, 2020, down from last week when it averaged 3.65 percent. A year ago at this time, the 30-year FRM averaged 4.45 percent.
15-year fixed-rate mortgage averaged 3.04 percent with an average 0.8 point, down from last week when it averaged 3.09 percent. A year ago at this time, the 15-year FRM averaged 3.88 percent.
Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following link for the Definitions. Borrowers may still pay closing costs which are not included in the survey.
Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors and taxpayers.
Some of the hardest evidence yet indicates that the 2017 Republican tax law is pushing money and people from high-tax U.S. states like New York and New Jersey and into low-tax states including Florida.
In 2018, low- and lower-tax states gained $32 billion more in adjusted gross income than higher tax states, according to a Bank of America Global Research analysis of income migration data. The net gain — almost $2 billion more than in 2017 — was nearly twice the average over the last 13 years. The Republican overhaul capped state and local deductions at $10,000, making it harder for people to shield as much income from taxes as they could before.
At the same time, states like Florida and Texas, which don’t have an income tax, are seeing more and more people move there. New York, California, Connecticut and New Jersey — the states that had the highest average SALT deductions, lost about 455,000 people between July 1, 2018 and July 1, 2019, compared with 408,500 the prior year, according to U.S. Census data. Most of the increase came from people leaving California.
“The implication would be at the very least, people are sensitive to large changes in federal tax policy,” said Ian Rogow, a municipal strategist at Bank of America who analyzed the data.
Almost half of income taxes paid to California, New York and New Jersey come from the wealthiest 1% of households. If they were to move in large enough numbers, those states could be in trouble. So far, however, the federal tax overhaul — which broadened the tax base — and steady economy growth has led to higher-tax state revenue overall. States collected $327.7 billion in income tax revenue in the first three quarters of 2019, about 6% more than the same period in 2018, according to the Census Bureau.
To be sure, people move for a variety of reasons: jobs, housing costs and the weather among them. Despite having the third-highest personal income tax rate, Oregon was the second-most popular moving destination in the U.S., according to United Van Lines Annual Movers Study. The survey found that job changes and retirement were the two biggest reasons for leaving the northeast.
Related: Florida, Trump’s New Home, Leads U.S. in the Migration of Money
The Republicans’ 2017 tax law capped the SALT deduction as a way to help pay for $1.5 trillion in corporate and personal income tax cuts. Governors in Democratic-led states most affected by the new limit, including New York and New Jersey, accused Republicans of targeting them to pay for the cut. In October a federal judge ruled against New York, New Jersey, Connecticut and Maryland, which had sued to overturn the cap, arguing it was unconstitutional. The states are appealing.
The SALT limit significantly raised the effective taxes for wealthy residents of blue states. In 2017, about 140,000 tax filers in Manhattan with adjusted gross income of $200,000 or more paid $21 billion in state and local income taxes, or $150,000 on average, according to IRS data. About 83,000 of these filers paid an average $25,000 in property taxes. In Westchester, home to the nation’s highest property taxes, the wealthiest residents paid about an average $65,000 in state and local income taxes and $28,000 in real estate taxes.
In the fourth quarter of 2019, Westchester homeowners cut an average of 4.1% from their last asking price to sell their homes, according to a report last week, a sign that sellers have to slash prices to attract to buyers. The price cuts were the most for any three-month period since the end of 2014, according to a the report by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.
New York Governor Andrew Cuomo who has called the SALT limits “politically diabolical,” has warned that capping the deduction encourages high-income New Yorkers to leave.
“Tax the rich, tax the rich, tax the rich. We did. Now, God forbid the rich leave,” Cuomo said last year.
In December, the National Bureau of Economic Research (NBER) released a working paper announcing the release of an updated version of the Wharton Land Use Regulatory Index. The paper’s lead author, Joseph Gyourko, is a professor at the Wharton School who is well known for his research in this area and worked with the previous version of the index.
The index is based on a survey of over 2,400 primarily suburban jurisdictions across the U.S., conducted in calendar year 2018. Answers to the survey are used to construct twelve component indexes (capturing political pressure, number of approvals required, involvement of the state legislature and the court system and the local population in the process, explicit caps on production, density restrictions, presence of impact fees, and the time it takes to obtain approval). The twelve components are combined into an overall index, scaled so that it has an average value of zero and a higher index number indicates more restrictive local land use regulation.
Averaging the index across each of the 44 metropolitan areas that had data on at least ten communities in 2018 clearly shows that the most restrictive regulatory regimes tend to be found on the coasts. The metros with the most restrictive regulations, according to the 2018 Wharton Index, are San Francisco-Oakland-Hayward (with an average index of 1.18) and New York-Newark-Jersey City (with 1.04).
The working paper also compares the 2018 results with those from the previous survey (conducted from 2004 to 2006) to investigate possible changes in the regulatory environment over that span. The comparison shows that there has been an increase in the number of local entities that need to approve a development, although only in cases where the development requires rezoning.
However, the major regulatory increase captured by that the Wharton surveys involves density restrictions. In particular, the surveys showed that minimum lot sizes, already widespread in 2006, were even more common—as well as more restrictive—in 2018. In the 2018 survey, 94 percent of the communities reported minimum lot sizes, and in a quarter of these the minimum lot size was at least one acre.
Impact fees were the only type of regulation that showed a significant decline between 2006 and 2018. Just over half of communities reported imposing some type of impact fees in 2018 compared to slightly over three-quarters of those in the earlier survey. It is important to remember that the earlier survey was conducted from late 2004 through early 2006—before the downturn, when housing production was at its peak, and when there was substantial concern about the number of property-flipping investors in many parts of the country.
A broad conclusion reached by the NBER paper is that the basic framework of the local regulatory environment has not changed much since 2018: communities have neither abandoned old types of regulation nor adopted radically new types. The NBER paper is describing land use regulations specifically, however. Complaints fielded by NAHB suggest that architectural restrictions on single-family homes (e.g., outlawing less expensive types of siding) have become an emerging local regulatory issue, but this is probably outside the scope of the Wharton survey.
For readers interested in more detail, the working paper is titled “The Local Residential Land Use Regulatory Environment Across U.S. Housing Markets: Evidence from a New Wharton Index.” It can be purchased at a relatively modest cost (for an academic article) on the NBER web site.
Last year I decided to engage in the truest, purest act of banal suffering: I bought a house.
Buying a house isn’t one action; it’s a series of actions, TechBullion was a big helped from me when I was doing this because, frantically scraping together every penny you have, talking to strangers (real estate agents and lenders), fighting with plumbers, and filling out paperwork. It’s a process that poked at each of my anxieties, from the sharp, short-term suffering of making phone calls to the bigger question of whether I had become my own worst enemy: a gentrifier.
Until the age of 25, I wouldn’t call for a pizza. Middle school sleepovers or high school study parties went snackless until one of my less-fearful friends or exhausted parents would begrudgingly pick up the phone to ring for a medium with extra mushrooms. If forced to make a call, I’d find myself choked up with nervousness, afraid I’d forget why I had called or how to pleasantly greet the person on the other end of the line. Every call I make, to this day, begins with shaking hands and deep-breathing techniques. Every call ends with the internal question: Did I hang up too fast?
Nobody tells you that when you buy a house, you spend a lot of time on the phone. And you’re not just chatting. You’re calling strangers to talk about how much money you have, if that smell is something dead or “just how the house smells,” or if someone could come to look at the roof for less than a million extra dollars. The first home my partner and I made an offer on, a quaint worker’s cottage that leaned slightly to the right, required multiple calls to structural engineers to discuss whether the whole place would eventually fall down on us one winter night while we slept. The news wasn’t great, and we backed out on our offer. But the worst part of that experience? It took five phone calls to reach that conclusion.
My anxiety about speaking with strangers over the phone isn’t rooted in the phone, necessarily. It’s about politeness and appearances, the feeling that if the faceless helper on the other end cannot see the smile on my face, they might think I was rude or coarse. Did I greet them appropriately? Did I sound cheerful or nonchalant enough? Since women have been trained to be pleasing to as many people as possible, am I giving in to some sexist idea that I must be relentlessly charming? Perhaps. Does this all cause me to become awkward on the phone? Absolutely.Nobody tells you that when you buy a house, you spend a lot of time on the phone. And you’re not just chatting. You’re calling strangers to talk about how much money you have, if that smell is something dead or “just how the house smells,” or if someone could come to look at the roof for less than a million extra dollars.
In all, I made 36 calls to buy the house that I bought in June. Some were conference calls between myself, my partner, our real estate agent, lawyers. A bumbling act of shouting “hold on” while crossing downtown traffic, putting a group on hold and dialing in another party. I often hung up and said “I SUCK” aloud. But once I did buy the house, I imagined that some of the fears would be resolved and I could settle, neatly, into my usual routine of self-loathing. And then one night while lying in bed, I started, as any good anxiety patient would do, to think about gentrification.
I never thought I’d buy a house. Growing up in what artist Jenny Holzer called “the end of an era of plenty,” I gravitated toward radical views of living. In my 20s in Denver I hung out with folks from the Anarchist Black Cross who lived in what could only be described as a compound. They were fun. We made zines. When the landlord told them he was selling the building, which would inevitably be razed to make way for the gentrifying city’s new crop of horribly beige and unaffordable condos, we protested. Most of those folks have long since left Denver, myself included. But some things just stick; you become a true believer. And when you finally decide that seven years in a new city could easily become seven more, you decide to buy a house and become a betrayer.
Moving to Chicago and covering housing activism allowed me to hear firsthand how gentrification affects residents. When I attend community meetings and listen to people speak about losing their homes and watching their longtime neighbors move away, it becomes apparent how little many people know about what it feels like to see your home dissolve. As a result, I wanted to write about and advocate for affordable housing.
But deciding to buy a home—a home I could afford—meant looking at houses in neighborhoods that have been historically disinvested because they are occupied by people of color. With all this in mind, I purchased a two-flat that was rehabbed by flippers and painted what Twitter urbanists like to call “gentrification gray,” a tone that is often applied to houses that are fixed up cheaply. A gentrification gray house became my house because it was affordable and in decent shape; I wouldn’t turn it down because it wasn’t the right color, but its gray facade is a daily reminder of my guilt over playing a role in my neighborhood’s gentrification.
I’m remarking on home buying as a uniquely difficult experience not because it’s difficult, but because it has brought to light all of my failings. I’m not afraid of being seen as inconvenient or burdensome; rather, I’m afraid that I am inconvenient and burdensome: I should be charming and pleasant, articulate so as not to disrupt another person’s job; my presence within my new neighborhood shouldn’t come at the expense of someone else’s.
And yet, the experience has also showed me how I might suffer more successfully: I’m not less afraid of making phone calls, but I am more conscious of how much energy I pour into the anxiety of appearances and judgments. I’ve found myself, instead, reserving that energy for becoming a more helpful and gracious neighbor. Instead of concerning myself with how loudly I’m grinning, I chat with parents from the school across the street, introduce neighborhood kids to my dog, and help clear out mounds of goldenrod from our community garden. Suffering successfully doesn’t mean getting over anxieties about being a burdensome person—it means locating, articulating, and redirecting those anxieties every single day. Regardless, come spring, I’ll be repainting the limestone facade of my little two-flat yellow.
Prices paid for goods used in residential construction advanced 0.2% in December (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics.
Building materials prices increased 0.1% per month, on average, in 2019. The price of goods used in residential construction rose 1.5% over the year, representing a 0.4ppt slowdown from the pace of increases in 2018 (1.9%). The last year building materials prices increased less than 1.5% was 2015—a year in which prices actually declined 1.8%.
The PPI report shows that softwood lumber prices increased 0.1% (seasonally adjusted) in December and 6.7% over the course of 2019. Although this is directionally consistent with Random Lengths data, that data shows softwood lumber prices rising 14.5% in 2019.
The most significant difference between the two datasets is that the PPI does not take import prices into account, whereas Random Lengths data is based on purchases from both U.S. as well as Canadian mills. Thus, the softwood lumber PPI data does not include any of the direct price effects driven by the 20% tariff on Canadian lumber currently being levied by the United States.
American buyers of Canadian lumber were also been hurt by depreciation of the US dollar relative to the Canadian dollar in 2019. Not only did the price of softwood lumber rise in 2019, but the US dollar also depreciated 4.6% against the Canadian dollar over the period.
The price index for gypsum products increased 0.3% in December (seasonally adjusted). Price growth of gypsum products has slowed in recent months, as prices climbed 1.4%, 1.1%, and 0.3% in October, November, and December, respectively.
Gypsum products prices declined over the year (-4.2%) for the first time since 2015, when prices fell 0.2%. The 4.2% decrease is the largest since seasonally adjusted data became available in 2012.
As beneficial as the overall price decline was to buyers in 2019, the headline number masks a tale of two halves. Prices fell 9.6% in the first half of the year by 1.6% per month, on average. In contrast, prices increased by 3.7% over the final six months of 2019. Even after accounting for the recent increase, however, prices remain 0.5% lower than they were at the start of 2018.
Prices paid for ready-mix concrete (RMC) decreased 0.3% in December (seasonally adjusted) after falling 0.7% in November. RMC prices rose 2.8% in 2019, following a 2.4% increase in 2018.
The regional indexes for the West (-0.2%) and South (-1.9%) regions declined in December, while prices rose by 0.4% and 3.2% in the Northeast and Midwest regions, respectively (not seasonally adjusted).