NAR released a summary of existing-home sales data showing that housing market activity this January rose modestly 0.6% from December 2020. January’s existing home sales reached a 6.69 million seasonally adjusted annual rate. January’s sales of existing homes rose 23.7% from January 2020.

The national median existing-home price for all housing types rose to $309,900 in January, up 14.1% percent from a year ago. Home prices have continued to escalate, and this marks the 107th consecutive month of year-over-year gains.

Regionally, all four regions showed double digit price growth from a year ago. The West had the largest gain of 16.1% followed by the Northeast with an increase of 15.8%. The Midwest showed an increase of 14.7% and the South had the smallest price gain of 14.6% from January 2020.

January’s inventory figures dropped 1.9% from last month standing at 1.04 million homes for sale. Compared with January of 2020, inventory levels dropped 25.7%. This would mark 20 straight months of year over year declines. It will take 1.9 months to move the current level of inventory at the current sales pace.

It takes approximately 21 days for a home to go from listing to a contract in the current housing market. A year ago, it took 43 days.

From December 2020, two of the four regions had increases in sales. The South had the largest gain of 3.2% followed by the Midwest with an increase of 1.9%. The Northeast had a decline of 2.2% followed by the West with the biggest dip of 4.4%.

From a year ago, all four regions showed double digit increases in sales. The South region had the largest gain of 25.1%. The Northeast had an increase in sales of 24.3% followed by the Midwest with a rise of 22.7%. The West had the smallest gain of 21.3%.

The South led all regions in percentage of national sales, accounting for 43.9% of the total, while the Northeast had the smallest share at 13.0%.

In January, single-family sales were up 0.2% and condominiums sales were up 4.1% compared to last month. Single-family home sales were up 23.0% while condominium sales were up 28.8% compared to a year ago. The median sales price of single-family homes rose 14.8% at $308,300 from January 2020, while the median sales price of condominiums rose 8.6% at $269,600.

Michael Hyman

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Freddie Mac (OTCQB: FMCC) today released the results of its Primary Mortgage Market Survey^® (PMMS^®), showing that the 30-year fixed-rate mortgage (FRM) averaged 2.81 percent, the lowest rate in our survey’s history which dates back to 1971.

“Low mortgage rates have become a regular occurrence in the current environment,” said Sam Khater, Freddie Mac’s Chief Economist. “As we hit yet another record low, the tenth record this year, many people are benefitting as refinance activity remains strong. However, it’s important to remember that not all people are able to take advantage of low rates given the effects of the pandemic.”

News Facts

• 30-year fixed-rate mortgage averaged 2.81 percent with an average 0.6 point for the week ending October 15, 2020, down from last week when it averaged 2.87 percent. A year ago at this time, the 30-year FRM averaged 3.69 percent.
• 15-year fixed-rate mortgage averaged 2.35 percent with an average 0.5 point, down from last week when it averaged 2.37 percent. A year ago at this time, the 15-year FRM averaged 3.15 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.90 percent with an average 0.2 point, slightly down from last week when it averaged 2.89 percent. A year ago at this time, the 5-year ARM averaged 3.35 percent.

The PMMS^® is focused on conventional, conforming, fully-amortizing home purchase loans for borrowers who put 20 percent down and have excellent credit. 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.

• The number of empty rental apartments in Manhattan nearly tripled compared with last year, according to a report from Douglas Elliman and Miller Samuel.
• The inventory of empty units, which rose to 15,000 in August, is the largest ever recorded since data started being collected 14 years ago, the report said. 
• Hopes for a rebound in the fall or the end of 2020 look increasingly unlikely.

A man enters a building with rental apartments available on August 19, 2020 in New York City.

The number of empty rental apartments in Manhattan nearly tripled compared with last year, as more New Yorkers fled the city and prices declined.

There were more than 15,000 empty rental apartments in Manhattan in August, up from 5,600 a year ago, according to a report from Douglas Elliman and Miller Samuel. The inventory of empty units is the largest ever recorded since data started being collected 14 years ago, the report said. 

Analysts say the rental market is the best barometer of overall strength in Manhattan’s real estate market, since rentals account for 75% of apartments and that market reacts more quickly to demand changing than the sales market.

Experts say the migration from the city to the suburbs during the Covid-19 crisis has been fueled in large part by Manhattan renters leaving the city.

“The rental market is weak and getting weaker,” said Jonathan Miller, CEO of Miller Samuel. “The first-time buyers in outlying areas are largely coming from the Manhattan rental market.”

Hopes for a rebound in the fall or the end of 2020 look increasingly unlikely. Although rental prices have come down — median rental prices fell 4% in August — the discounts are not steep enough yet to lure new renters back to the city. The average rental price for a two-bedroom in Manhattan is still $4,756 a month.

The fall is generally a slow period in the Manhattan rental market, especially before an election, Miller said.

Landlords are offering ever-larger incentives to try to entice renters, with the largest share of landlords offering concessions in history. On average, landlords were offering 1.9 months of free rent to new renters in August. The weakest segment of the rental market is the lower end, for one bedrooms and studios, partly a result of the pandemic’s greater impact on lower earners.

Average rental prices for studios fell 9%, to $2,574, while the average for one-bedroom apartments fell 5% to $3,445. 

The big question for the Manhattan economy and beyond is how far will the economic ripples from the weak rental market spread. While big landlords like REITs and real estate companies (see a great option here) have access to capital, smaller mom and pop landlords with just one or two buildings may have trouble paying their mortgages and property taxes, which could later hit banks and lenders, as well as New York’s tax revenue.

“Where you are already seeing stress on landlords is on the low end of the price spectrum,” Miller said. “You’re clearly seeing weakness in the smaller end of the rental market.”

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A smaller share of American adults were employed in April than ever before in records going back to 1948.

The employment-population ratio, which measures the share of Americans above the age of 16 who are employed, fell to 51.3 percent, the Department of Labor said Friday. A year ago, it was 60.6 percent.

The previous low was 55 percent in the summer of 1954.

In November 2007, the employment-population ratio was 62.9 percent. This rate fell consistently during the subsequent recession and several months beyond, before stabilizing around 58.5 percent in October 2009. Between October 2009 and March 2014, the ratio remained stubbornly low, fluctuating within 0.3 percentage points of 58.5 percent. It began to climb again in 2014, hitting its post-2008 peak of 61.1 in February of 2020.

The labor force participation rate fell by 2.5 percentage points over the month to 60.2 percent, the lowest rate since January 1973 (when it was 60.0 percent).

The unemployment rate jumped to 14.7 percent in April and the economy shed 20.5 million jobs, according to data released by the Department of Labor on Friday.

Over the past seven weeks, more than 33 million Americans have filed claims for unemployment benefits. But the number of claims has been declining for five consecutive weeks.

The Trump administration successfully pushed Congress to authorize direct payments to U.S. households to support incomes and to raise the amount paid by unemployment benefits by $600 a week, making it possible for some Americans to earn more through losing a job than they made working. The federal government is also backing over $600 billion of loans to small businesses that can be forgiven if those businesses avoid layoffs.

The Fed cuts its interest rate target to a range between 0 and 0.25 percent. In addition, it is in the process of launching a number of new lending facilities aimed at providing liquidity to struggling businesses.

But loans and direct payments can only go so far to offset orders that many businesses close their doors entirely or dramatically reduce the number of customers they serve. The customers were told to stay at home and avoid going out except to purchase essential items. Bars, theaters, and gyms were shuttered in much of the country. Restaurants were required to close dining rooms, remaining open only for take-out and delivery. Manufacturers often had to shut down altogether, including the plants of most automakers in the U.S. Health care establishments found themselves bereft of businesses as patients canceled elective procedures and even regular check-ups.

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www.breitbart.com/economy

Does this have anything to do with local taxes? You bet it does.

For the current edition of the Home Building Geography Index (HBGI), NAHB introduces a red vs. blue segmentation of the 3,221 counties of the United States.

“Red counties” are defined as those in which the majority of the population in the 2016 Presidential election voted for President Donald Trump, while “blue counties” are defined as those in which most of the population voted for then-Senator Hillary Clinton¹. The data show that the population distribution is 48.7% in red and 51.3% in blue².

While the population of the country is almost evenly split between red and blue counties, the same is not true for the distribution of single-family and multifamily construction. In fact, 61% of single-family construction is in red counties, while almost 64% of multifamily construction are in the blue counties. Blue counties tend to feature greater population density, hence the divide.

Moreover, the growth rates for home construction differ between red and blue counties. The map above shows the blue and red counties in the U.S. and the four-quarter moving averages of their year-over-year growth rates for single-family construction as of the end of 2019. Red counties posted growth of 1.7% for single-family home building, while blue counties posted a decline of 1.2%. This is likely due to differences in land availability/cost, as well as regulatory differences for construction. Indeed, lower growth rates in blue counties – compared to red – is expected given the relative cost of land in major metropolitan areas, making building a single-family home more expensive in such areas you will need to search for several contacts to find the right one for you and your budget, with https://www.asifoam.com/riverside/ you can get the best materials for your projects.

While there are differences between these two types of counties, both regions’ performances at the end of 2019 were clear improvements to relative periods of decline due to the housing soft patch during 2018, as seen on the figure below.

Although blue county multifamily construction growth was positive in 2019 (7.6%), the relatively smaller share of apartment construction in red counties posted a larger growth rate of 21.4%. This shows that red counties outperformed blue counties in both single- and multifamily development

Additionally, the above chart shows that, until 2019, multifamily growth was lower than single-family expansion for most periods since 2016.

With this edition of the NAHB/HBGI, additional new posts will examine updates for regional trends (large metros vs exurbs vs rural areas, etc.) for single-family and multifamily construction, as well as additional red vs blue analysis from a regional perspective.

1. We use Dave Leip’s Atlas of U.S. Presidential Elections for election results at the county level. The red vs. blue segmentation cleanly applies to all U.S. states except for Alaska, which, by tradition, has had electoral votes casted in Presidential Elections according to House District. To circumvent this problem, we use a county-equivalent analysis that imputes House District-level election data that was done by RRH Elections (https://rrhelections.com/index.php/2018/02/02/alaska-results-by-county-equivalent-1960-2016/).
2. Conventional wisdom is that the American population is concentrated in major metropolitan areas, i.e., those that voted for Hillary Clinton, even though the red counties far outnumber the blue, 2,633 over 507, respectively. The near 50-50 population split, as noted above, however, is due to the number of red counties with populations of 1,000 or above.

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