Industry Wrap: Economists Speculate Next Rate Hike in March, Says Reuters
By Laura Haverty | January 14, 2016
Thursday’s Industry Wrap summarizes important news and events each week from around the housing finance industry. Material on external websites may be subject to publisher’s access policy.
Some States and Cities May Not be Cheering Cheaper Oil
For states with economies tied to the energy sector, lower oil, gas and coal prices can “bring layoffs, belt-tightening and less demand for housing,” notes a recent CNN article. "Fewer jobs means less home buying demand and that will naturally soften the housing markets in those job-impacted areas," Lawrence Yun, chief economist at the National Association of Realtors, tells CNN. According to the article, states that could be most affected include North Dakota, Wyoming, West Virginia and Alaska. The largest cities with the highest risk of falling home prices are Houston and Austin. (Read article)
NAR Forecasts Modest Increase in Home Sales for 2016
Following the housing market's best year in nearly a decade, the National Association of Realtors (NAR) is forecasting that existing-home sales will expand in 2016 at a more moderate pace as pent-up buyer demand comes up against affordability pressures and meager economic growth. NAR expects total existing-home sales to finish the year up 6.5 percent from 2014 at a pace of around 5.26 million—the highest since 2006, but roughly 25 percent below the prior peak of 7.08 million in 2005. The national median existing-home price for all of 2015 will be close to $221,200, up around 6 percent from 2014, NAR says. It expects existing sales to grow between 1 and 2 percent (5.30 to 5.40 million) in 2016 and prices between 5 and 6 percent. (View video and article)
Builder Confidence Edges Down One Point in December, Says NAHB
Builder confidence in the market for newly constructed single-family homes remained relatively flat in December, dropping one point to 61 on the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). “Overall, builders are optimistic about the housing market, although they are reporting concerns with the high price of lots and labor,” says NAHB Chairman Tom Woods, a home builder from Blue Springs, MO. (Read press release)
Could the Next Rate Hike Happen in March?
The Federal Reserve will raise interest rates again in the next two months, according to two-thirds of economists polled by Reuters. According to the poll, taken just days after the Fed hiked rates in December for the first time in nearly a decade, 77 of 120 economists Reuters contacted say rates will next move higher by March. And all others but two say they expect to see the next hike in the second quarter. (View article)
Floating Houses Emerge in the Netherlands as Sea Level Rises
Professional Builder reports that in the Netherlands, where more than half the people live below sea level, 97 houses in Amsterdam's Ijburg neighborhood are made to float. Floating houses are built by creating foundations of concrete, then filling them with Styrofoam. This design concept is said to make them “virtually unsinkable,” says the article. (View article)