Displaying items by tag: housing

(Miami)

The latest CPI numbers have made a splash once again as prices make some of the fastest paces in growth since…see the full story on our partner Magnifi’s site

(New York)

One of the most eye-opening aspects of the pandemic’s impact on the economy has been in housing. The housing market has been on fire since Spring, with a gigantic boom in suburban home sales. The big question is whether this is the start of a sustained trend or a more temporary one. Most analysts think it was just a short-term move. Overall mortgage applications have flattened in recent months at the same time as listings have been rising, showing that supply and demand are changing. Additionally, there is a divergence in the type of demand. Demand for high end homes is stronger, but for cheaper housing it is much weaker.

FINSUM: The pandemic has affected those at the lower end of the socio-economic latter more strongly than those at the top, and combined with how the virus itself has incented social isolation, it is no wonder suburban housing has boomed. That said, it seems temporary almost by definition.

(New York)

Now that many signs are pointing to an improving US economy, some investors think it is time to shift out of growth stocks and into more cyclical sectors. That said, cyclicals—which rely on consumer spending improvements—are going to be a hard place to invest because of the highly variable recovery path for different sectors created by COVID. With that in mind here are a few places to look: transportation (excluding airlines), such as the iShares Transportation ETF (IYT); or infrastructure, like the Global X Infrastructure Development ETF (PAVE); ecommerce and home entertainment, such as the Amplify Online Retail ETF (IBUY); or housing, either through single names like Home Depot and Lowe’s, or a broader homebuilders ETF like the SPDR S&P Homebuilders ETF (XHB).

FINSUM: We find homebuilding to be a very interesting opportunity. One of the reasons that the real estate market has held up is that homebuyers are typically those higher on the socio-economic ladder, whose incomes are much less likely to have taken a hit from the pandemic. Therefore, the growth trajectory for that whole sector looks strong.

(Atlanta)

In what looks like a very positive sign for the housing market, US mortgage rates have just hit an all-time low. The 30-year rate for fixed rate mortgages is 2.98%. The stat comes from Freddie Mac and it is the first time ever that rates have fallen below 3%. The super low rates have sparked a refinancing boom and stoked confidence in the real estate market. Some have wondered why mortgage rates haven’t fallen faster given the plunge in the general yield environment. According to Freddie Mac, this is because banks have been so overwhelmed with demand for mortgages that lowering rates didn’t make sense. In Freddie Mac’s words “There is no point in lowering prices to gain business you can’t close anyway”.

FINSUM: It seems like rates may fall even further as lenders catch up with demand. Overall, the housing market is looking very strong.

(New York)

Hopes for the housing market had been rising strongly in the last couple of months. After nearly a year in the doldrums, existing homes sales rose for a pair of months in July and August, giving the market hope that falling mortgage rates had revived the market. However, in September, sales again fell sharply, with existing home sales dropping 2.2% from the previous month. Prices, however, are rising, as short supply is moving asking prices higher.

FINSUM: Prices are holding up okay, but there is not much buying and building occurring, which means housing will be contributing less to the economy overall.