Category Archives: Pound Ridge

Fed raises rates | Pound Ridge Real Estate

Federal Reserve officials, meeting for the first time under Chairman Jerome Powell, raised the benchmark lending rate a quarter-point and forecast a steeper path of hikes in 2019 and 2020, citing an improving economic outlook. Policy makers continued to project a total of three increases this year.

“The economic outlook has strengthened in recent months,” the policy-setting Federal Open Market Committee said in a statement Wednesday in Washington. Officials repeated previous language that they anticipate “further gradual adjustments in the stance of monetary policy.”

The upward revision in their rate path suggests Fed officials are looking through soft first-quarter economic reports and expect a lift this year and next from tax cuts passed by Republicans in December. Financial conditions have tightened since late January as investors look for signs that the central bank might raise rates at a faster pace, while forecasters predict stronger U.S. growth and tight labor markets.

The vote to lift the federal funds rate target range to 1.5 percent to 1.75 percent was a unanimous 8-0.

The latest set of quarterly forecasts forecasts showed that policy makers were divided over the outlook for the benchmark interest rate in 2018. Seven officials projected at least four quarter-point hikes would be appropriate this year, while eight expected three or fewer increases to be warranted.

In the forecasts, U.S. central bankers projected a median federal funds rate of 2.9 percent by the end of 2019, implying three rate increases next year, compared with two 2019 moves seen in the last round of forecasts in December. They saw rates at 3.4 percent in 2020, up from 3.1 percent in December, according to the median estimate.

Inflation Pickup

In another change to the statement, the Fed said inflation on an annual basis is “expected to move up in coming months,” after saying “move up this year” in the January statement. Price gains are still expected to stabilize around the Fed’s 2 percent target over the medium term, the FOMC said.

The central bank’s preferred price gauge rose 1.7 percent in the 12 months through January and officials projected it to rise to 2 percent in 2019 and hit 2.1 percent the following year, the latest estimates showed. The estimates for inflation excluding food and energy, which officials see as a better way to gauge underlying price trends, rose to 2.1 percent in 2019 and 2020 from 2 percent seen in December.

“Job gains have been strong in recent months, and the unemployment rate has stayed low,” the FOMC said. The statement said that household spending and business investment “have moderated” from strong fourth-quarter readings.

The statement also repeated previous language that “near-term risks to the economic outlook appear roughly balanced.”

Powell will hold his first post-FOMC press conference at 2:30 p.m. local time.

Supply, Demand

The Fed’s goal is to keep supply and demand in balance in the economy amid a tight labor market, without lifting borrowing costs so quickly that the economy stalls.

Officials have had to factor in the impact of fiscal stimulus signed by President Donald Trump since their previous projections.

The median estimate for economic growth this year rose to 2.7 percent from 2.5 percent in December, signaling confidence in U.S. consumers despite recent weak readings on retail sales that have pushed down tracking estimates of first-quarter activity. The 2019 estimate rose to 2.4 percent from 2.1 percent.

The committee’s forecast for the long-run sustainable growth rate of the economy was unchanged at 1.8 percent, suggesting policy makers are still skeptical of the effect of tax cuts on the economy’s capacity for growth. The 2020 gross domestic product growth median projection was also unchanged at 2 percent.

While U.S. unemployment of 4.1 percent is the lowest since 2000, wage growth has remained moderate and inflation has been below the Fed’s target for most of the last five years.

The median projection for the long-run fed funds rate ticked up to 2.9 percent from 2.8 percent in December. The Fed had been gradually reducing its estimate of the long-run neutral fed funds rate since it began publishing its calculations in January 2012.


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Monthly home price up .3% | Pound Ridge Real Estate

The average prices of single-family houses with mortgages guaranteed by Fannie Mae and Freddie Mac in the United States increased 0.3 percent month-over-month in December 2017, following an upwardly revised 0.5 percent gain in November and missing market expectations of 0.4 percent. Year-on-year, house prices went up 6.5 percent, the same pace as in the previous month. Housing Index in the United States averaged 0.29 percent from 1991 until 2017, reaching an all time high of 1.20 percent in January of 2000 and a record low of -1.80 percent in November of 2008.



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Tight home buying market | Pound Ridge Real Estate

The tight US housing market is prompting a growing number of homebuyers to bid before they’re able to see the properties in person, a Redfin survey found.

Last year, 35% of homebuyers — over a third — made an offer sight-unseen, according to a survey conducted late last year. That’s up from 33% of buyers that were polled in May 2017, and 19% of those polled in June 2016.

It shows how heated the race to make the fastest and most attractive offer has become.

Because builders are unable to keep up with the pace of demand, housing markets in many major cities are tight, except at the luxury end. Additionally, existing homeowners trying to upgrade may be able to sell quickly, but often hesitate knowing they’ll face a much tougher buyer’s market. That’s making even fewer homes available for sale.

Millennials were much more likely than older homebuyers to make offers sight-unseen. Redfin’s Greg McCarriston, who authored the report, said this was partly because the younger demographic tends to have more faith in what they see when shopping online. Remote shoppers also relied on agents to conduct live video tours, and for advice on details like school districts and neighborhoods.

A full 57% of offers in Los Angeles were made sight-unseen, while 46% of offers San Diego, and 44% in San Francisco were made remotely, according to the study.

“Demand is relentless despite all of these headwinds homebuyers should be facing in terms of low inventory competition and high prices,” Cheryl Young, a senior economist at Trulia, told Business Insider. “I think we’ll actually see demand continue going up this year.”




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Single Family Construction Spending Up | Pound Ridge Real Estate

NAHB analysis of Census Construction Spending data shows that total private residential construction spending grew 0.4% in October to a seasonally adjusted annual rate of $517.7 billion. It was a modest gain after a 0.2% dip in September. The total private residential construction spending was 7.4% higher than a year ago.

The monthly gains are largely attributed to the steady growth of spending on single-family and home improvements. Single-family construction spending edged up 0.3%, and remodeling spending rebounded by 1.4% in October. However, multifamily construction spending slipped 1.6% after the September dip, and was 2% lower since a year ago.

The NAHB construction spending index, which is shown in the graph below (the base is January 2000), illustrates the strong growth in new multifamily construction since 2010 and a steady growth in single-family construction and home improvement spending.

Private nonresidential construction spending increased 2.1% to a seasonally adjusted annual rate of $432 billion. However, it was 1.3% lower than a year ago. The largest contribution to this month-over-month nonresidential spending increase was made by the class of office ($2.5 billion), followed by transportation ($1.1 billion), and lodging ($0.6 billion).




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Home Features that Use Water | Pound Ridge Real Estate

Almost exactly half of residential water use consists of water used outside the home (e.g., for watering lawns), according to a recent NAHB study.  Indoors, the biggest users of water are toilets, followed by showers, faucets, clothes washers and leaks.

These results of the NAHB are based on data that became available in 2016 in the form of Residential End Uses of Water (REUW), a detailed study and data set of single-family homes produced by the Water Research Foundation.

In total, the single-family homes in the REUW study used an average of 276 gallons of water per day (gpd).   Almost exactly half of this was attributable to water used outside the home.  It is well known that lawns and gardens need more watering in climates that are hot and get little natural rainfall, so this helps explain the climate-related pattern to state water use per housing unit shown in last week’s post.  Indoors, toilets account for the greatest share of water use, but the shares for showers, faucets, clothes washers and leaks are also substantial.

The numbers in the chart above include both hot and cold water. The water heater in and of itself is not counted as an end use; the end use is where the water goes after leaving the heater.  If storing water in a tank to heat it increases indoor water use, this would not be characterized as an identifiable end use and would show up in the “other” category.  The 2016 REUW studies hot water use specifically in a sample of 94 homes and found that hot water accounted for one-third of total indoor water use.

Although it is not feasible to parse specific indoor uses by age of structure in the REUW data, it is possible to do this for total water used per single-family home.  Results show less water used by homes built before 1960, but relatively small differences among homes built after that.  For example, there is less than a 3 percent difference between the 244 gpd used by homes built in the 1960s and the 251 gpd used by homes built after 1999.

One possible explanation for lower water use in homes built before 1960 is the incidence of swimming pools.  Not surprisingly, statistical models in the REUW study indicate that swimming pools have a particularly strong impact on household water use.  Although 12 to 15 percent of homes built after 1959 in the REUW data have swimming pools, swimming pools are present on only 8 percent of homes built in the 1950s and only 3 percent of homes built before 1950.

This result, along with many others, is discussed more thoroughly in the full NAHB study.


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US Housing Starts Fall | Pound Ridge Real Estate

Housing starts in the United States fell sharply by 4.7 percent from the previous month to a seasonally adjusted annualized rate of 1,127 thousand in September 2017 from an upwardly revised 1,183 thousand in August, compared with market expectations of a 0.5 percent decline to 1,180 thousand. It was the lowest level since September 2016, as Hurricanes Harvey and Irma disrupted the construction of single-family homes in the South. Housing Starts in the United States averaged 1435.60 Thousand from 1959 until 2017, reaching an all time high of 2494 Thousand in January of 1972 and a record low of 478 Thousand in April of 2009.

United States Housing Starts


US Housing Starts Fall for 2nd Month

Housing starts in the United States fell 0.8 percent from the previous month to a seasonally adjusted annualized rate of 1180 thousand in August of 2017, following an upwardly revised 1190 thousand in the previous month and compared to market expectations of a 1.7 percent rise. Starts declined in the Northeast and the South.

The volatile multi-family segment slumped 5.8 percent to 323 thousand. In contrast, single-family starts, the largest segment of the market increased 1.6 percent to 851 thousand. Starts went down in the Northeast (-8.7 percent to 105 thousand) and the South (-7.9 percent to 563 thousand) but rose in the Midwest (22 percent to 200 thousand) and the West (4 percent to 312 thousand).
Building permits increased sharply by 5.7 percent to a seasonally adjusted annualized rate of 1300 thousand, way above market expectations of 1220 thousand. Authorizations of units in buildings with five units or more jumped 22.8 percent to 464 thousand while single-family permits dropped 1.5 percent to 800 thousand. Permits rose in the Midwest (8.8 percent to 185 thousand), the West (15.3 percent to 362 thousand) and the South (3.7 percent to 646 thousand) but fell in the Northeast (-13 percent to 107 thousand).
Year-on-year, starts rose 1.4 percent and permits went up 8.3 percent.

Data released for August suggested a limit impact from storms as Hurricane Harvey impacted construction activity in Texas only for the last week of the month and Hurricane Irma did not have an impact until September. Moreover, the response rate from areas affected by both hurricanes was not significantly lower than normal. Together, Texas and Florida accounted for about 13 percent of 2016 US authorizations and 26 percent of authorizations in the South region.

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Dealing with home emergencies | Pound Ridge Real Estate

Grease Fire in the Kitchen

Grease Fire in the Kitchen

Home emergencies are best planned out before the case of an emergency. Never use water to put out a grease fire – it splashes the grease around and often makes things worse. Instead, look around for a handy metal lid from a nearby pot (a wok lid, for example, is ideal). Cover the fire with the lid until it suffocates and dies down. Then carefully remove the hot lid to observe the damage. If a lid is not around, carefully douse the fire with baking soda. Sorry, but your food is probably finished. Plus: How to Prevent Home Fires

Burst and Broken Pipes

Burst and Broken Pipes

Your home has a main water valve – often in the basement or near the front of the house – that controls the flow of water: If you have a bad leak, you need to turn this valve off immediately to prevent expensive water damage (this is also a good preventative step if you are leaving the house during winter). Then inspect the pipes to find out what is damaged and needs to be replaced. If freezing water caused your pipes to burst, you should also consider pipe insulation.

Furnace Failure

Furnace Failure

Remember to shut down electrical power to your furnace before taking a look inside. If you have a gas furnace, check to see if the pilot light has gone out and needs to be re-ignited. If the pilot light isn’t the problem, look for signs of damaged wiring or burnt out switches and sensors to narrow down the problem. Make sure the fan and motor are also working. If any of these components have failed, call a professional about a repair date. Photo: Neil Lockhart/Shutterstock

Overflowing Toilet

Overflowing Toilet

Toilets typically overflow when they can’t stop running and cannot drain properly. First, stop the flow by turning off the valve in the back of the toilet near the wall, which shuts down water. Quickly mop up standing water before it causes any damage, then look for the source of the problems. First look for issues with the fill tube and float that may keep the toilet running, then look for clogs and other issues that are keeping the toilet from draining.

Broken Windows

Broken Windows

Pull on thick gloves and carefully inspect the damage. Pick up any glass shards and remove any jagged, dangerous edges while noting the extent of the damage. You can seal the window by taking a trash bag and cutting it with scissors to fit the window opening. Tape several layers of this bag plastic to the window’s frame with duct tape. Window repair professionals typically offer same-day repairs if you don’t have enough time for a DIY project.

Power Outage

Power Outage

Pull out your phone for a guiding light and make sure everyone is OK. Then check nearby homes and streetlights: If they still have power, you should check your breakers to see if there was an overload or other problem that caused the shutdown. If everyone has lost power, call up your power company (or visit online) to document the power loss and get information about repair times. If the outage is going to last at least several hours, start making plans to put refrigerator or freezer perishables on ice or toss them out.

Confirmed Mice in the House

Confirmed Mice in the House

Grab a flashlight and carefully inspect the perimeter both outside and inside your home. Look for three things: Droppings (a sign that mice are sticking around), signs of chewing/nests and any tiny crevices that mice may be using. Cover crevices with sealant or wire mesh to prevent further rodent problems and set a series of traps to get rid of mice in the house. If mice continue to appear, call up a professional inspector before they start causing structural damage.

Ant Infestation

Ant Infestation

If you notice trails of ants, remove the ants and thoroughly clean everywhere they’ve been with a vinegar spray to remove their trail scents. Then start looking for cracks and gaps in windows, doors, floorboards and other areas the ants may be emerging from. If you can’t narrow it down, set up ant traps and call a professional to see if you have a nearby nest. Remember, large black carpenter ants are a more serious threat to your home than other species and should be removed quickly.

Smoking Oven

Smoking Oven

Some light smoking is expected with brand new ovens or ovens with spilled oils or food. Clean the oven compartment thoroughly, making sure any oil or chemical residue is removed. For worse smoking problems, switch the oven off and open up windows around the house to encourage air flow (this is also a good time to see how sensitive your smoke detector is). If your oven is overcooking food, make sure the timer controls are working. Plus: Stove Repair

Leaking Water Heater

Leaking Water Heater

Check your temperature and pressure valve, a small faucet toward the top of the hot water heater. If the tank develops pressure issues, water will be evacuated from this valve: It’s not a leak, but it is a sign that you need to check wiring and settings. Real leaks from a broken valve or cracked tank are more serious: Shut down your water supply and consider your options. Repairs typically require fully draining the tank, which at least gives you an excuse to clean out any sediment at the same time.

Ceiling Leak

Ceiling Leak

If the ceiling is dripping, prevent water damage by gathering buckets or plastic sheets under the leak. Then climb to your crawlspace or attic and track down the source of the leak: This could be anything from a broken pipe to a damaged roof underlayment and the leak may be far from the source of the problem, so this requires some patience. If you cannot narrow down the source, call in an experienced professional. Meanwhile, get ready to patch and repair your ceiling. Bottom line is these types of home emergencies are best to be dealt with right away. Plus: 12 Roof Repair Tips
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US Builder Confidence Falls in September | Pound Ridge Real Estate

The NAHB Housing Market Index in the United States dropped to 64 in September 2017 from a downwardly revised 67 in the previous month. The reading came in way below market expectations of 67, as recent hurricanes have raised concerns about the availability of labor and the cost of building materials. All three HMI components posted losses in September but remain at healthy levels: current sales conditions fell 4 points to 70, sales expectations in the next six months dropped 4 points to 74 and buyer traffic slipped 1 point to 47. Nahb Housing Market Index in the United States averaged 49.52 from 1985 until 2017, reaching an all time high of 78 in December of 1998 and a record low of 8 in January of 2009.

United States Nahb Housing Market Index


Calendar GMT Actual Previous Consensus TEForecast
2017-07-18 02:00 PM NAHB Housing Market Index 64 66 67 66
2017-08-15 02:00 PM NAHB Housing Market Index 68 64 65 65
2017-09-18 02:00 PM NAHB Housing Market Index 64 67 67 66
2017-10-17 02:00 PM NAHB Housing Market Index 64 64.04
2017-11-16 03:00 PM NAHB Housing Market Index 64.23
2017-12-18 03:00 PM NAHB Housing Market Index  

Fewer investors flip homes in Q2 | Pound Ridge Real Estate

Investors flipped less homes during the second quarter as the returns decreased for the third consecutive quarter, according to the Q2 2017 U.S. Home Flipping report from ATTOM Data Solutions, a multi-sourced property database.

Home flipping dropped to 5.6% of all home sales during the second quarter, or 53,638 single-family homes and condos, down from 6.9% in the first quarter but unchanged from last year.

According to the report, a home flip is defined as a property that is sold in an arms-length sale for the second time within a 12-month period. The information is based on publicly recorded sales deed data collected by ATTOM Data Solutions in more than 950 counties accounting for more than 80% of the U.S. population.

Not only is home flipping down overall, but the average gross flipping profit also decreased for the third consecutive quarter, falling to $67,516 during the second quarter. This represents a 48.4% return on investment for flippers, down from 49% the previous quarter and 49.6% from the second quarter last year to the lowest level since the third quarter of 2015.

“Home flippers are employing a number of strategies to give them an edge in the increasingly competitive environment where flipping yields are being compressed,” ATTOM Senior Vice President Daren Blomquist said. “Many flippers are gravitating toward lower-priced areas where discounted purchases are more readily available, often due to foreclosure or some other type of distress.”

“Many of those lower-priced areas also have strong rental markets, giving flippers a consistent pipeline of demand from buy-and-hold investors looking for turnkey rentals,” Blomquist said. “In markets where distressed discounts have largely dried up, flippers are showing more willingness to leverage financing when acquiring properties, often purchasing closer to full market value and then relying more heavily on price appreciation to fuel their flipping profits.”

As the market share and number of home flippers drop, the dollar volume of home flipper financing climbed to nearly a 10-year high.

More than 35% of homes flipped in the second quarter were with financing, up from 33.2% in the previous quarter and 32.3% last year. This also marks the highest level since the third quarter of 2008.

The dollar volume of this financing increased to $4.4 billion, up from $3.9 billion in the first quarter and from $3.4 billion in the second quarter of 2016, reaching the highest level since the third quarter of 2007, a nearly 10-year high.


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Mortgage rates drop to 3.78% | Pound Ridge Real Estate

MCLEAN, VA–(Marketwired – Sep 14, 2017) – Freddie Mac (OTCQBFMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average mortgage rates remaining largely unchanged from last week’s year-to-date low.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.78 percent with an average 0.5 point for the week ending September 14, 2017, the same as last week. A year ago at this time, the 30-year FRM averaged 3.50 percent.
  • 15-year FRM this week averaged 3.08 percent with an average 0.5 point, the same as last week. A year ago at this time, the 15-year FRM averaged 2.77 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.13 percent this week with an average 0.4 point, down from last week when it averaged 3.15 percent. A year ago at this time, the 5-year ARM averaged 2.82 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.

Attributed to Sean Becketti, chief economist, Freddie Mac.
“Following a sharp decline last week, the 10-year Treasury yield rose 11 basis points this week. The 30-year mortgage rate, however, remained unchanged at 3.78 percent. If Treasury yields continue to rise, mortgage rates could see an increase in next week’s 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 and taxpayers. Learn more at, Twitter @FreddieMac and Freddie Mac’s blog