An efficient HVAC system can you save you loads of money in the long run and keep your home nice and comfortable throughout the year. Problems in the ductwork, however, can quickly consume your energy budget and make it hard to heat and cool certain areas of the home. If you suspect your HVAC system is not working properly, follow this short guide to help identify and fix common ductwork problems.
Abnormal Energy Bills
A sudden spike in your energy bill is a good sign that your home’s HVAC system is compromised. Leaky connectors and poor designs lead to air flow loss, which makes the system work harder to heat and cool the home. This in turn expends more energy and runs up the electricity bill.
Another good indication of a bad HVAC system is noisy ductwork. In rectangular ducting, these noises are usually the result of the metal expanding and contracting. It should be noted that noises are typical when the system first turns on or off. You should be concerned, however, if the noises continue while the system is running. If you hear a whistling sound, for example, you are likely dealing with vent covers that are too small for the system.
If you have areas of the home that are hard to heat and cool or get overly stuffy, your HVAC system probably has a leak or two. Uneven temperatures are caused by poor air flow because the system is simply losing too much air to properly do its job. In extreme cases, you will not be able to heat or cool certain areas of the home even if the thermostat is turned to its highest setting.
Finding Problem Areas
Detecting problems in the ducting is a straightforward process. The biggest issues typically include bad seals around joints, improperly seated vents, and poorly supported ducts. You might also examine the overall design of the ductwork as the installer may have made mistakes in the original installation. Look for areas that feature sharp turns in the ducting as this can significantly reduce air flow.
You can also feel for air loss with your hands. Start by feeling the air pressure coming out of vents in multiple rooms. If you detect a difference between vents, then you know you have a leak somewhere in line with that vent. You can narrow down the location of the leak by using some incense, toilet paper, or wet fingertips. The incense and toilet paper will move or your fingers will get cold when coming in contact with the leak.
Examine the ducting for any obvious signs of gaps, holes, and cracks. The most likely problem areas include connections and seams, and places where the ducting links up with the ceiling, floor, registers, and vents. For flexible ducting, ensure the pieces are not crimped or tangled.
Fixing Ductwork Leaks
Once you locate the problem area, it’s time for a little repair. All you need to repair leaky ductwork is some HVAC-grade aluminum foil, a putty knife, gloves, and a few cloths. Begin by cleaning the area with a damp cloth and keep a lookout for any sharp edges. It’s recommended to use mastic for loose fittings, though foil tape can also prevent air loss. Just make sure the connection is tightened up and the screws are back in place before you apply tape. If you detect any major cracks in the ducting, you may need to replace the section with a new piece of sheet metal.
Gary Cohn: ‘People don’t buy homes because of the mortgage deduction’-or do they?
In the midst of the mad selling and explaining and quantifying and qualifying of potentially the biggest U.S. tax overhaul in decades, President Donald Trump‘s chief economic advisor stood at a White House podium and made a bold declaration: “People don’t buy homes because of the mortgage deduction.”
He said that, even though members of the Trump administration have repeatedly said they will “protect” the popular tax break.
There are a lot of reasons people buy homes — financial, practical and emotional. For the vast majority of those who make that choice, it is by far their single largest investment. Until the financial crisis, the common belief was the home prices always rise, and a home was therefore a proven way to build wealth, but that was proven wrong.
More than 6.5 million homeowners lost their homes to foreclosure in the past 10 years, according to Attom Data Solutions, and 2.8 million current homeowners still owe more on their mortgages than their properties are worth. This after home prices plummeted nationally for the first time since the Great Depression.
Most consumers, at least according to several recent surveys, still believe that a home is a good investment. The majority of renters still aspire to homeownership, despite the fact that millennials have been deemed the “renter generation.” That designation is likely more due to high student loan debt and lower initial employment for this generation than anything else. Millennials have also been slower to marry and have children, which are the primary drivers of homeownership.
“I think people buy homes because it represents security and a way to build wealth and a sense of stability,” said Laurie Goodman, co-director of the Housing Finance Policy Center at the Urban Institute. “I don’t think the mortgage interest deduction plays a large role in that decision.”
For a great many homeowners, the deduction isn’t even a financial factor. A taxpayer can only take the deduction if he or she itemizes, and just one-third of taxpayers itemize, but about 64 percent of Americans own a home (and just over one-third of homeowners have no mortgage). Three-quarters of those who do itemize take the deduction, but if the standard deduction were raised, fewer taxpayers would itemize, and therefore the mortgage deduction would be used even less.
“Gary Cohn is probably right about that,” said Richard Green, director and chair of University of Southern California’s Lusk Center for Real Estate. “It does absolutely encourage people to buy bigger houses than they would, but does it flip the switch between buying and renting? — maybe half a percent in homeownership, very little.”
Green notes that the deduction is most important to those living in states like California, which has both high tax rates and high home prices. Home prices there, he said, could drop without the deduction. As for overall homeownership, he points to other nations like Canada and Australia, which have no mortgage deduction but have very high homeownership rates.
The National Association of Realtors, one of the most powerful lobbying organizations in Washington, vehemently opposes any change to the deduction. Even though there has been no change so far, they came out against the current plan, claiming that because it would result in fewer taxpayers itemizing, it would weaken the power of the deduction.
“This proposal recommends a backdoor elimination of the mortgage interest deduction for all but the top 5 percent who would still itemize their deductions,” wrote NAR President William Brown in a release. “When combined with the elimination of the state and local tax deduction, these efforts represent a tax increase on millions of middle-class homeowners.”
In response to Cohn’s statement, Brown said, “There’s a reason our nation has incentivized homeownership in the tax code for over a century. It works, and helps make homeownership more affordable for middle-class families who might not otherwise be able to close the deal, while setting them on track for a strong financial future.”
Tax breaks do work. Witness the first-time homebuyer tax credit, designed to spur homebuying during the housing crash. It did cause a temporary but sizeable jump in home sales. The mortgage interest deduction, however, gives bigger benefits to those in higher tax brackets with larger loans. In other words, it benefits more wealthy owners, and is therefore less likely to the driving factor for homeownership.
Still, Brown contends that the lost incentive for even some to buy a home, “could cause home values to fall.”
Could home values really fall under the new tax plan? That depends less on taxes and more on the fundamental reason why home prices are currently overheating, which is a historically low supply of homes for sale. It is unlikely that the very strong supply and demand imbalance right now would be hit hard by any changes to the mortgage deduction, especially given that the largest generation is entering its homebuying years.
“We’ve got big supply issues right now. The reason housing purchases are down is because supply is down,” said Dan Gilbert, CEO of Quicken Loans in an interview on CNBC’s “Squawk Box.” Gilbert was more concerned with interest rates than the deduction and the net amount consumers will pay in taxes in the end.
Quicken Loans founder Dan Gilbert: As long as rates are reasonable, mortgage deduction going away doesn’t matter
The fact is, today’s housing market needs more houses far more than it needs lower taxes. In that respect, the mortgage interest deduction is far less important than tax savings for small-business owners, like homebuilders, who could increase production if costs were lower. The vast majority of homebuilders are small-business owners.
“I think the lower the cost of doing business, the more you can create a situation that leads to affordable housing,” said Jerry Howard, CEO of the National Association of Home Builders, in an interview on CNBC’s “Power Lunch.” “The women and men that make up the homebuilding sector are businesspeople as well, and we have to look at the holistic treatment of business taxes and housing taxes.”
NAHB CEO: We have to look at tax reform plan holistically
While the realtors claim that without the savings from the mortgage deduction, some buyers couldn’t afford a home, others claim home prices are higher because the savings from the deduction gives consumers more buying power.
30-year fixed-rate mortgage (FRM) averaged 3.85 percent with an average 0.5 point for the week ending October 5, 2017, up from last week when it averaged 3.83 percent. A year ago at this time, the 30-year FRM averaged 3.42 percent.
15-year FRM this week averaged 3.15 percent with an average 0.5 point, up from last week when it averaged 3.13 percent. A year ago at this time, the 15-year FRM averaged 2.72 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.
Quote Attributed to Sean Becketti, chief economist, Freddie Mac.
“After holding steady last week, rates ticked up this week. The 10-year Treasury yield rose 8 basis points, while the 30-year mortgage rate increased 2 basis points to 3.85 percent.”
“We have better light rings than any other products on the market,” says Adam Mittleman. This is a sentence that I have never before heard uttered by anyone, even after a long time living on Planet Earth. But because I am visiting Nest, and Mittleman is its Head of Product Design, working on a new gadget that this startup-turned-controversial Alphabet division is launching, I can’t say I am surprised. After all, light rings—the shimmering glow-circles that allow digital appliances to provide feedback—have been a leitmotif for Nest throughout its eventful journey of disrupting the home. Thermostats, smoke alarms, and now Nest’s new home security system signal users via rings. Nest has given a lot of thought to them. Literally years of thought.
Naturally, there is a light ring on the Nest Guard, which is the hub of the Nest Secure suite. That suite has been in the works since well before the company was acquired by Google in January 2014 and then underwent a second recalibration in October 2015 when Google made Nest one of the divisions (“bets”) in the Alphabet archipelago. Depending on the message the new Nest Guard wants to convey, its ring might glow red, yellow or green.
Mittleman passionately cites the three potential problems that occur if a company does not pay attention to the design of its light rings. “One, the light is too direct, so that calls too much attention to itself,” he says. “Two, color uniformity can be really bad. Say, a yellow might look like some mix between oranges and reds and yellows, and it just doesn’t look really good. Three, hotspots. That’s the most common affliction—they’ll be much brighter in one location and then get dim and then bright and then dim and bright and dim.”
Red, yellow, green. In its brief history, Nest’s own progress might also be charted by a color-shifting light ring signaling the unit’s varying fortunes. Because Alphabet doesn’t break out sales figures or other numbers for Nest, it’s hard to say for sure what those actual fortunes are, but these days a yellow beam might be cutting the company a break. For a long stretch, Nest’s biggest splashes have been product recalls, destructive public infighting, and the departure of its CEO and cofounder. Meanwhile, Nest hasn’t announced a major new product category in ages. Until today. In Nest’s biggest moment in years, it is announcing a series of products that take it onto new ground—and, it hopes, flips its light ring to green for good.
The new products include the aforementioned Nest Secure, a home security system; Nest Hello, an internet-connected doorbell; an outdoor version of its Nest Cam IQ security camera (which uses Google face recognition to identify people who wander into range); and, perhaps most significant, the integration of the voice-based Google Assistant into Nest products, beginning with the indoor IQ camera.
The launch not only brings Nest into new territory, but also sends a signal that despite changes and setbacks, it’s still powered by the same impulse: to transform the home by reinventing mundane home appliances and services with internet connectivity and cutting-edge design. “The DNA hasn’t changed,” says Matt Rogers, who cofounded the company in 2010 with its first CEO, Tony Fadell. “But I think we finally are able to achieve what we’ve always talked about doing. We’re in millions of homes now. We’ve laid this foundation of products that solve really important problems and now we can link them together and do more with them.” Given, of course, that the lights glow green.
The face of Nest used to be Fadell, a visionary product designer best known for his iPod work, and a famously exacting leader. (He reportedly tried to cut short his cofounder’s honeymoon so the new bridegroom could address some product crises. Rogers refused.) The new leader would prefer not to be its face. When Fadell left in June 2016, Larry Page replaced him with Marwan Fawaz, a nuts-and-bolts guy who is much in the mold of other recent Alphabet division leaders: experienced, middle-aged guys (always guys) known less for vision than for delivering quarterly results. Though Fawaz is not reticent about invoking his considerable experience, his approach is methodical and straightforward. And decidedly not flamboyant. “They call me No Drama Marwan,” he says.
Fawaz’s previous jobs have involved launching and managing products for cable and telecom firms. The jewel of his resume was leading the Motorola Home product, a rare success in the troubled recent history of that firm. Also of note is his chairing the Technical Advisory Board of the security firm ADT. Fawaz says that his marching orders from Alphabet CEO Page were clear: “We want to make sure the presence in the home, and the business, is meaningful and global and [that] it’s successful. That it could thrive on its own as a business. You can interpret that by financial discipline, bringing new products to market, scaling the business.” Though it was widely believed that Alphabet was considering offers to sell off Nest (a rumor confirmed to me by knowledgeable sources), Fawaz assured Nesters on day one that the company was not for sale. He takes pains to assure me that despite what some may believe, the company will not go back on the block. “Selling Nest is not the right decision,” he says. “Nest has so much potential being in the Alphabet family.”
Fawaz sees his job as carrying forth the Nest mission by scaling its current products to larger audiences and markets. “We’re about creating the conscious home,” Fadell once saidabout the mission. “To take a truly important device that has had no great innovation and make that device really, really great.”
But that message got lost in a series of blunders and corporate shifts. The calamities began soon after the Google acquisition, when the company discovered a serious flaw in its smoke alarm. Its coolest feature, the Nest Wave—the ability to shut down a false alarm by waving your hand—held a potential danger: Under some circumstances it could have kept the alarm silent during a real fire or carbon monoxide release. Though no case like that had ever been reported, Nest halted sales for a few weeks and issued a recall to disable the feature in 440,000 Protect units.
During the next few years, news from Nest always seemed to have a bite to it. Users pestered the company with lawsuits about marketing promises and other issues. Rumored products didn’t appear. And everybody wondered just how many gadgets Nest was selling. Alphabet’s silence did not build confidence.
In June 2014, Nest bought Dropcam for $555 million, filling a gap in its smart home strategy with the connected camera leader. Though Nest’s painstaking integration of the technology into its system proceeded, however, it failed at combining the two companies’ cultures. Dropcam’s former CEO Greg Duffy, who had joined Nest to head the camera team, became so frustrated—primarily with Fadell—that he reportedly suggested that Page remove Fadell and make himCEO. After Duffy was rebuffed, he took his gripes public in a scathing Medium post.
Meanwhile, under the new Alphabet structure, tough-minded CFO Ruth Porat was putting the “bets” on a shorter leash, demanding better quarterly results. This didn’t please Fadell, who believed that investing in innovation was more important at the moment than focusing on profits. (All these woes and more were mercilessly recounted in a well-circulated takedown by The Information.)
Fadell left Nest in June 2016. Fawaz immediately replaced him.
(Some wondered why Fadell’s cofounder Rogers did not get the nod. His answer is: not yet. “I love spending time on product and design [but] having a sole product- and design-focused CEO is not enough. You need someone who’s focused on either the business or product, but it’s hard to do both. I think the split that Marwan and I have works really well. Maybe I’ll be CEO of Nest one day. Maybe a CEO of a different company.”)
The pileup of calamities might have hurt Nest’s profile among the digerati. But those who remained at the company (though, indeed, some Fadell loyalists have split) say that aside from the personalities of the respective leaders, the culture is still pretty much the same. One positive sign was the return early this year of Nest’s original VP of technology, Yoky Matsuoka, who left the company in 2015 and wound up at Apple. “When I started to look for the place where I can really have the most impact, I was really surprised to see that Nest was on the top of the list,” she says.
The real measure of Nest’s success, however, rests on its sales figures. Alphabet keeps those closer than the secrets of its search algorithm—but if you shake the tea leaves just right, you can see signs that Nest has sold pretty well. The fact that it had to recall 440,000 smoke detectors indicates that, even at its high price, the Nest Protect was a hit. Also, Nest products always seem to hold high positions on Amazon’s best seller lists. As I was researching this story, I actually got some concrete evidence: While talking about how he hoped the company would grow in the future, one of Nest’s executives blurted out a number: “Nest is on track to be a billion-dollar run rate company by the end of the year.” And that’s before Nest hits the market with the roster of products it’s launching today.
Making a security system—a connection-dependent home appliance whose current incarnations have been driving users crazy—has always seemed to be in Nest’s wheelhouse, and everyone has long assumed the company was working on one. Indeed, Nest has being doing just that—for almost four years. So the introduction of Nest Secure (shipping in November) and the companion video doorbell (out early next year) have been years in the making. In that time, Nest has finished up a communications protocol (Weave) and a wireless standard (Thread) to develop a platform where not only Nest products but also outside developers could plug in together and connect a whole Internet of Things-worth of stuff. But another reason it took so long was the high stakes of getting something wrong. “If a music app fails, people can say, ‘Wow. That’s a crappy product.’ The consequences aren’t so big,” says Matsuoka, who is now Nest’s Chief Technology Officer. “But in security, you have to make sure the door sensor works reliably every time the door cracks open.”
As with most Nest products, the apparent star of the show is a control device that gives users a window into the workings of a tool that was previously buried in analog obscurity. In the case of Nest Secure, that is a sleek tabletop disk—much in the mold of the recent routers from Eero or Google—that replaces the standard (ugly) keypad where customers anxiously tap in their codes before an alarm shrieks.
Head of Product for Nest Secure Sophie Le Guen explains the advantages: flexibility in placement (not everybody uses the same door to enter a house); no need to rip open the walls to install wiring; and it looks good. It also provides a number of ways to avoid what Nest discovered was the biggest failing of current systems: false alarms, the majority of which are caused by the same beloved family members (and their pets) that the system is meant to protect. The most important way of defeating those unwelcome, ear-piercing warnings (the Nest Guard is capable of 85db of eardrum misery) is a walnut-sized fob known as the Nest Tag—a $25 personalized pebble that verifies (via near-field communications) someone who’s supposed to be there. If you open a door or window when the system is alarmed, holding the Tag near the Nest Guard prevents the sound blast. “I can give it to my mother-in-law, I can give it to my kid, and they have no stress about how to arm and disarm because you just tag in and tag out,” says Le Guen. Not that you have to give your mother-in-law (or, say, the dogwalker) constant access: Using the Nest App, you can specify limited times and dates that the tag will work.
Like memorable character actors crushing in cameos, the real showstoppers of Nest products are often its sensors—and this is especially the case with Nest Secure. Called Nest Detect, the security system’s new $59 sensor performs double duty as a motion detector and a magnet-equipped monitor that detects when a door or window is opened. Another advantage of the Nest Detect is something it doesn’t do: light up when it detects motion. “People don’t want to be reminded that there’s a security device [watching them],” says Le Guen.
Steven Favreau is the type to go big – and go home.
When he set out to put down roots near his hometown of Boston, Favreau fell in love with an old country estate in quaint Chelsea, VT. It was the perfect place for this interior designer to escape from the hubbub of big city life after working with celebrity clients and more.
“It was a quintessential Vermont house in a quintessential Vermont town,” said Favreau, about spotting the house in 2012. “I hopped on a plane and bought it the next week.”
Built in 1832, the house was once owned by a man named Aaron Davis, whose family lived in it for at least 100 years. Davis’ granddaughter eventually sold the 23-acre property in the 1980s, and the new owner converted it into a bed and breakfast. (There’s still a portrait of Davis above one of the home’s five fireplaces.)
After Favreau purchased the 5-bed, 5-bath home, he sought to restore it to its original grandeur – at a frenetic pace. A contractor brought in a crew to rework everything from the wiring (it was a fire waiting to happen) to the wallpaper (there were 8 layers throughout the house). The workers even put in a massive new beam to support the house and keep it from sinking.
“The house sprung back to life and all the old Lally columns fell to the ground,” Favreau remembered. “They heard, ‘Bam-bam! Clank-clank!’ as they jacked it back to life.”
Up next on the designer’s list: keeping the look, feel and integrity of the antique touches, while updating the space to accommodate today’s trends. He tore out a downstairs wall to expand the kitchen to 700 square feet; the master suite got a modern bath with a soaking tub.
Favreau painted walls in his signature bright colors and added bold wallpaper. In a tip-of-the-hat to the history of the Green Mountain State, he lined the master bathroom with tree-print wallpaper. The dining room got a splash of flamingo pink with a print of Victorian-looking cake plates – a nod to the era in which the house was built.
“What I wanted to use for inspiration was the house and the period of the house, so nodding to the period and updating it with a contemporary aesthetic,” Favreau said. “It says today, but it also says yesterday.”
Some things are distinctly New England. A wooden footbridge connects the main property to 22 secluded acres on the other side of the White River. On warm summer nights, Favreau’s family will pull a dining room table out onto the bridge and dine al fresco.
In the winter, the adjacent land allows for snowshoeing or cross-country skiing.
There’s also an old wood barn, which Favreau envisions becoming an event space for weddings or storage. The possibilities for the next owner are limitless, he said.
“It’s a big glorious house, and my family is a big glorious family. We’ve enjoyed it,” he added. “I feel like I’ve loved my time being there and up in Vermont, but it’s time to find the next one. Maybe an oceanside property.”
The home is on the market for $695,000. Zoe Hathorn Washburn of Snyder Donegan carries the listing.
The NAHB Housing Market Index in the United States fell to 64 in July of 2017 from a downwardly revised 66 in June, below market expectations of 67. It is the lowest reading in eight months. The index of current single-family home sales went down 2 points to 70; sales expectations over the next six months declined 2 points to 73 and buyer traffic edged down 1 point to 48. Nahb Housing Market Index in the United States averaged 49.44 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.
Construction on new houses fell in May for the third month in a row even though builders are optimistic about the economy, perhaps a sign a shortage of skilled workers is holding the industry back.
The pace of so-called housing starts declined by 5.5% to an annual rate of 1.09 million, marking the lowest level in eight months. Economists polled by MarketWatch had forecast housing starts to total 1.23 million.
Home builders are now working at a slower pace than they were one year ago. They’ve especially pared back on apartment buildings and other large multi-dwelling units, giving more emphasis to single-family homes.
Part of the recent slowdown might reflect a bit of a pause after an unusually warm winter during which builders were much busier than usual. Some economists contend a higher level of construction that occurred earlier in the year would have normally taken place in the spring.
The residential #construction data may be experiencing some payback from favorable weather over the winter
Yet builders increasingly complain they cannot find enough good construction workers to get the job done and that could be constricting them. Consider the recent slide in building permits. They fell 4.9% in May to an annual rate of 1.17 million, the lowest level in 13 months.
Permits are also below year-ago levels,
In May, the biggest drop-off occurred in the South and Midwest. Construction rose slightly in the West and was flat in the Northeast.
For years the housing market has experienced a mini-renaissance of sorts as a steadily growing economy, rising employment and ultra-low interest rates enabled home people to buy homes.
The outlook might not be as favorable now, though. Aside from widespread labor shortages, prices for wood and other raw materials have also risen. And the Federal Reserve has embarked on a series of increases in a key U.S. interest rate that helps determine the cost of borrowing, a potential brake on future sales..
Find your way to The Market on Spring for fresh foodie fare in a quaint setting.
PHOTOS COURTESY MARKET ON SPRING
Most Northern Westchesterites who drive Route 35 are on a mission — to get from one town to another in a hurry, to make a train, or to pick up their kids. But, there’s a charming spot just minutes off this busy thoroughfare that’s certainly worth the detour.
The Market on Spring is at the center of the tiny but lovely hamlet of South Salem. Antiques, a riding academy, a tack shop, and cozy tavern are just about all you’ll find here, but that’s what makes it so wonderful. The small market is the perfect fit, renovated last year in a mix of natural wood and rustic metal, and serving carefully sourced, high-quality fare for breakfast and lunch. Though tucked away, the shop is attracting a steady stream of customers, explains manager and Vista native Bryce O’Brien. “People tell us they’ve lived in the area for years and have never made the turn onto Spring Street, never knew ‘anything was here,’ but now they’ve found us.”
Maybe word is getting out about the delicious sandwiches made from New York State grass-fed beef, or cage- and hormone-free turkey (all roasted in-house by Market’s chefs), with condiments such as chipotle remoulade, onion jam, and honey mustard aioli. The organic egg breakfast sandwiches (options include house-cured salmon and homemade chorizo) are also gaining a dedicated following. O’Brien says the shop’s country industrial decor and elevated deli menu are especially appealing to city folk who weekend at homes on nearby Lake Truesdale. Well, we suburbanites know a good thing when we see it, too!
Sales of newly constructed homes stumbled in April, as builders retreated after a March surge that marked the strongest selling pace in a decade.
New-home sales ran at a seasonally adjusted annual rate of 569,000, the Commerce Department said Tuesday. That was well below the MarketWatch consensus forecast of a 610,000 annual rate, but was offset by sharp upward revisions to data from prior months.
In particular, March’s pace was raised to a pace of 642,000, the highest since October 2007.
April’s figures were 11.4% lower for the month, but 0.5% higher than in the same period a year ago.
The government’s new-home sales data are based on small samples and are often heavily revised. Total sales in the first four months of the year are 11% higher compared with the same period a year ago.
In April, the median sales price for a new home was $309,200, down from $318,700 in March and $321,300 in the year-ago period. As the pace of selling decelerated, there were 5.7 months’ worth of homes available, up from 4.9 months in March. A market with a healthy balance between supply and demand typically has about 6 months’ worth of inventory.
One factor worth noting, April was one of the rainiest months in decades, and that may have helped dent sales. Ralph McLaughlin, Trulia chief economist, said while he wasn’t worried about data from one month, builders still have a way to go before residential construction normalizes.
“If we compare the share of new home sales to total sales, that share needs to more than double,” McLaughlin wrote in a Tuesday note. New-home sales made up nearly 12% of total sales, about half the historical average, he said.
The 12-month rolling total of sales rose to 88.3% of their 50-year average, McLaughlin added.
One of President Trump’s common refrains on the campaign trail was that he would help rebuild the country’s crumbling infrastructure, leaning on his extensive experience in real estate and development to shepherd forth a plan to cut red tape, move projects forward, and put this country to work.
More than 100 days into his administration, his grand design has yet to take shape, though it’s been a constant source of conversation in D.C. There has been movement over the last few days, with reports saying that the Trump team has solicited bids for potential infrastructure investments from across the country and looks toward releasing a plan in the fall that would steer $200 billion of public money to infrastructure investment.
Curbed spoke to infrastructure experts to get their take on Trump’s nascent plans: what should be included, what to watch for as plans come together, and its chances to clear both houses of Congress and help America get to work.
Watch the numbers
Henry Petroski, a Duke professor and infrastructure expert, says that spending on roads and construction is “like apple pie and motherhood—everybody’s for it.” There’s a lot of talk about some kind of plan, a proposal both candidates supported last year, and representatives and senators will have a tough time voting against it, Petroski says. It’s still taking shape, but based on previous reports and statements from Trump administration officials, it would include a combination of government investment, new funding mechanisms to encourage private investment, and regulatory reform to help accelerate approvals and construction timelines.
That makes it all the more important to watch how funding is allocated. The trillion-dollar proposal the Trump administration is developing sounds like a lot, and it is: The federal government’s annual budget is about $3.8 trillion, including entitlements such as Social Security and Medicaid. Petroski believes the spending will most likely be spread out over 10 years, which means a 100 billion dollars annually, roughly double the amount currently being spent on roads and bridges. Doubling funding is a big deal, but it’s important to put things in perspective.
“We can’t just look at the headlines that say $1 trillion; we need the details,” he says. “This isn’t just an issue with this administration, however. This happens with every administration.”
Will states take the lead?
While the Trump administration has promised to have a plan together by this fall, some analysts, such as Petroski, are skeptical. He feels that health care and other priorities may derail infrastructure this year, at least on the federal level.
Federal delays in approving new spending, however, have spurred many cities and states to take action. Federal infrastructure is tagged to the gasoline tax, which hasn’t been raised since 1993 (Trump has flirtedwith the idea of raising it to fund infrastructure spending). But many states have raised their own rates or passed spending measure to fund infrastructure (federal dollars are, on average, only responsible for 25 percent of infrastructure spending, according to Petroski).
“Close to half the states have raised the state gasoline taxes in the last couple of years, and the others are considering it,” he says. “They simply can’t wait for the federal government to do something.”
Will we build green infrastructure?
In addition to how much we’re going to spend on infrastructure, another big question is what we’re going to spend money on. Armando Carbonell, a senior fellow and urban policy expert at the Lincoln Institute, says one of the biggest problems with any Trump infrastructure plan is the administration’s stance on climate change. It’s not just that any potential new construction may ignore public transit and sustainable options that reduce carbon emissions, it’s that not acknowledging a changing climate means money will be misspent.
“We need infrastructure to protect communities from the effects of climate change that can’t be avoided,” he says. “Sea-level rise, flooding, the effects of wildfires; in many cases, there are infrastructure needs that should be a priority, such as protecting coastal cities. If we don’t take climate change into account, we may well build infrastructure that is vulnerable. There are simple things we can do, such as building on higher elevations, that take account of a rising sea level. If we don’t do that, any investment might be a bad one.”
How will regulations be changed?
One of Trump’s promises has been that by creating a new regulatory system, reforming current processes, and encouraging public-private investments (or P3s) he can cut red tape and move long-stalled projects forward. Like other aspects of an infrastructure overhaul taking shape, the devil is in the details.
Carbonell says proper oversight and regulatory update could give the sector a massive upgrade, saving time and money. There are “great benefits” to looking at what and how we do things, especially the procurement and finance processes.
“I don’t have a black or white view of P3s, other than to say people need to be careful and look out for the public interest,” says Carbonell. “With proper regulations and design, P3s may be part of the solution. But we can’t get something for nothing. If we want a trillion-dollar investment in infrastructure, we need to spend a trillion dollars.”
Others have a more pessimistic view of pushing for more private investment in infrastructure. According to urbanist and journalist Yonah Freemark, the push for privatization in infrastructure investment is consistent with Trump’s rhetoric—Secretary of Transportation Elaine Chao has been open to finding new private funding sources for infrastructure, and the proposed Trump budget does make massive cuts in public transportation spending—but will also significantly shape the way any new infrastructure policy works.
“One thing we know is that there’s no way private-sector entities would be involved with an infrastructure project unless it involves user fees or ways to make revenue,” he says. “That makes sense; why would you invest in a project that couldn’t make money? But that changes the decision-making process. It’s the perspective of a profit-making private company, not the public sector.”
That translates into support for moneymaking projects, such as pipelines, toll bridges, and toll roads, not, say, water pipes, or roadways in less dense rural areas, according to Freemark.
What kind of jobs will it provide?
Trump has also promoted infrastructure as a jobs program to help with unemployment. According to Scott Myers-Lipton, a professor of sociology at San Jose State University and author of Rebuild America: Solving the Economic Crisis through Civic Works and Social Solutions to Poverty, it’s tough to “square the circle” when it comes to providing high-wage jobs while cutting regulations (and potentially, labor protections) and encouraging private investment.
He sees New Deal-era social works programs, which provided direct employment through the government, as a much more effective means of creating a large-scale jobs program and truly putting America back to work.
“How is it going to help people earn stable incomes?” he says. ”So far, he has not yet put forward a plan that, in that Rooseveltian sense, meets the goal of getting living wage jobs to as many people as possible. This was one of his big promises, spend big on infrastructure and drive unemployment down.”