MBMC CH 17 Macroeconomics: The Bird’s-Eye View of the Economy.
Eye on the Economy
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Transcript of Eye on the Economy
Eye on the EconomyNew Home Sales Disappoint in June
August 6, 2014
eyeonhousing.org
Rates on New Home Loans2
• Average effective mortgage rate for new home sales rose
• Current effective rate for new homes is slightly higher than the average for existing homes
• Read more here
New Home Sales3
• Market share of cash sales for new homes increased
• Higher than 2002-2003 average
• Market share of FHA-backed new home sales declined
• Read more here
Construction Spending4
• Residential construction spending up year-over-year
• Dollar volume pace of home building and remodeling down for last two months
• Improvement spending is down negligibly year-over-year
• Read more here
Housing Prices5
• House price growth remains above rate of inflation
• S&P/Case-Shiller 20-City Composite index eased to 9.3% in May
• FHFA Purchase-Only house price index increased 5.6%
• Read more here
Housing Prices Cont. 6
• 18 metro areas exhibited slower rates of growth
• 49 economist panel: Median forecast in the FHFA index for July 2014 was 4.7%
• Read more here
Pending Home Sales Index7
• PHSI fell 1.1% for the month
• Ends three month growth streak
• June was down 7.3% year-over-year
• Read more here
Existing Home Sales8
• Existing home sales had a 2.6% monthly increase in June
• Existing sales passed the 5 million mark
• First time since October 2013
• Read more here
Remodelers’ Confidence9
• Remodeling Market Index rose three points in Q2 of 2014
• Two out of three index components improved
• Indicators of future activity improved in Q2 of 2014
• Read more here
Homeownership Rate10
• Housing demand from newly formed households favors rental-markets over for-sale
• Homeownership rate fell to 64.8%
• Read more here
The Employment Situation for July11
• Payroll employment increased by 209,000 for the month
• Unemployment rose 0.1%
• Due to an addition of 329,000 into the labor force
• Read more here
GDP & FOMC12
• GDP Growth was up 4%
• Q2 experienced growth for exports and inventory investment
• NAHB is forecasting 1.7% overall GDP growth for the year
• Read more here
GDP & FOMC13
• Federal Reserve monetary policy committee agreed that Q1 GDP decline was due to transitory factors
• Indicated willingness to keep federal funds rate at the current low level
• Winding down asset purchase program
• Read more here
Affordability Pyramid14
• For a $1,000 increase in median new home price, more than 206,000 households would be priced our of the new home market
• 87 million households can afford a home price higher than $100k
• 22.8 million can afford a new home priced at $175k
• Read more here
Apartment Buildings Benefit from Sustainability
15
• Analysis of the relationship between multifamily housing and mortgage default for apartment owners
• Less likely if:
• Within a mile of open space
• In a neighborhood with significant retail presence
• Accessible to transit
• Meets certain affordability thresholds
• Read more here