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New York CNN —Sheila Bair, who had a front row seat to the subprime mortgage meltdown, is worried today’s housing market is unsustainably hot. A housing bubble can form when prices rise to unsustainable levels. “I see much less speculation in the housing market today, thank goodness,” said Bair. ‘Dizzying heights’Legendary investor Jeremy Grantham shares Bair’s concern about a housing bubble. In many ways, today’s housing market is the polar opposite of the one that preceded the Great Recession.
Persons: Sheila Bair, ” Bair, Bair, , she’s, there’s, Jeremy Grantham, ” Grantham, Goldman Sachs, Fannie Mae, Priscilla Almodovar, it’s, ” Almodovar, Lawrence Yun, homebuyers shouldn’t, ” Yun, Yun, America doesn’t Organizations: New, New York CNN, National Association of Realtors, CNN, Federal Deposit Insurance Corp, NAR, , UBS Locations: New York, Los Angeles, San Diego, Richmond, Cincinnati, Zurich, Tokyo, Miami, Toronto, Vancouver, London, America,
Home prices have appreciated for a 139th consecutive month, according to CoreLogic. Prices have now gone up by 42% since the start of the pandemic shutdowns in March 2020. These 20 metro areas are expected to see the price biggest spikes over the next year. August's home price index issued by CoreLogic revealed that home prices just rose for the 139th consecutive month on a year-over-year basis. August saw a 3.7% increase in home prices from last year, the biggest since February.
Persons: CoreLogic
Instead, the CEO of the eponymous investment research firm Meredith Whitney Advisory Group is concerned that the US housing market will face a correction in the coming years. Baby boomers may cause home values to sinkWhitney believes property prices are destined to fall under pressure as demographic shifts reverse deep-rooted supply-demand dynamics. An unprecedented pace of property price growth has disproportionately benefited baby boomers and the silent generation. However, Whitney said that an aging US population won't cause the housing market to crash overnight. While Whitney reserves her full insights for clients, she named four states where property prices will eventually weaken: Pennsylvania, Connecticut, New Jersey, and Illinois.
Persons: Meredith Whitney, Oppenheimer, Meredith, Whitney, haven't, CoreLogic There's, That's, you've, that's, it's Organizations: Citigroup, Advisory, National Association of Realtors Locations: Statista, Pennsylvania, Connecticut , New Jersey, Illinois, Texas
However, there are some key differences between the mechanics of credit cards and Helocs. Still, Helocs have far lower rates than credit cards, even for borrowers with strong credit scores. If interest rates climbed to 7% a year later, your payment would rise to $58 a month until the end of the draw period—unless interest rates move again or you draw more from the line. (Secured credit cards are an option for people with limited credit history; they require a cash down payment.) Consolidating credit card debt is another common use, since rates on credit cards can be as much as double what they are on home-equity loans.
Persons: Tanza Loudenback, Aly J, Helocs, you’ve, Robert Heck, won’t, Knight, Freddie Mac, You’re, Scott Fligel, , Eric Alexander, Heck, , ” Heck, Alexander Organizations: Yale, Federal, Federal Reserve, Northwestern Mutual, Income Locations: homeownership, Morty, Charlotte, N.C, Dallas
Tom Barkin, president of the Richmond Fed, recently commented on housing on the "Odd Lots" podcast. Home prices have stayed high as the pandemic sparked a "secular change" in the way people think about housing. That could mean sectors other than housing will need to see slowdowns, he suggested. AdvertisementAdvertisementHe added that the housing market ultimately remains imbalanced, and that could mean sectors other than housing will need to see slowdowns. But relative prices move all the time, and if what we've seen is a secular shift toward more demand for housing, that might mean somewhat less lessening of housing prices and somewhat more lessening of other prices."
Persons: Tom Barkin, , Barkin Organizations: Richmond Fed, Service
Between 2018 and 2022, weather and climate disasters cost more than $617 billion, it found — a record. Transportation of food and goods may also be hit by climate events, leading to more delays and shortages on store shelves. "Food insecurity disproportionately impacts lower-income households, families led by single mothers, families with children, and households in Southern states." Climate events can also lead to increased medical expenses. The Treasury report notes that in one analysis from 2012, 10 climate events led to a total of $10 billion in health-related costs.
Persons: Makatla, Joe Raedle, Graham Steele Organizations: U.S . Department of, Treasury, Treasury Department Locations: Tarpon Springs , Florida, U.S, Louisiana, Southern
The Fed's rate hikes are the equivalent of throwing "kerosene on the fire," Barry Sternlicht said. The real estate mogul has been a loud critic of the Fed policy. High interest rates mean the US is bound to enter a slowdown, he warned in a recent interview. download the app Email address Sign up By clicking “Sign Up”, you accept our Terms of Service and Privacy Policy . Central bankers raised interest rates aggressively in the last 18 months to lower inflation.
Persons: Barry Sternlicht, , Sternlicht, Powell Organizations: Service, Reserve, Starwood Capital Group, Fed, CNBC Locations: United States
US home prices rose in July to record-high levels
  + stars: | 2023-09-26 | by ( Anna Bahney | ) edition.cnn.com   time to read: +2 min
Prices rose 0.6% from the month before, according to seasonally adjusted data from the S&P CoreLogic Case-Shiller US National Home Price Index released Tuesday. Compared to a year ago, the national composite index also rose, with prices up 1% from July 2022, the prior peak, according to Case-Shiller data. In July, prices rose in all 20 cities after seasonal adjustment. Prices in Las Vegas were down 7.2% from a year ago and in Phoenix prices were down 6.6%. The West, where prices are down 3.8% from a year ago, and the South, with prices down 3.6%, continue to see annual price declines.
Persons: , Craig Lazzara, Dow, Selma Hepp, Freddie Mac Organizations: DC CNN, Dow Jones, CoreLogic, Federal Reserve Locations: Washington, Chicago, Cleveland, New York, Las Vegas, Phoenix
US annual home price growth accelerates in July
  + stars: | 2023-09-26 | by ( Amina Niasse | ) www.reuters.com   time to read: +2 min
REUTERS/Mike Blake Acquire Licensing RightsNEW YORK, Sept 26 (Reuters) - U.S. annual home price growth accelerated for a second straight month in July, signaling that softening prices in the market may be bottoming out, according to a report released on Tuesday. Home purchase prices increased 4.6% on a year-over-year basis in July, up from a revised 3.2% increase in the prior month. June marked the first acceleration in annual price growth since February 2022, the Federal Housing Finance Agency (FHFA) said. The report also showed prices rose moderately on a month-over-month basis, in line with the trend over the past quarter. "Regionally, all nine census divisions posted positive price appreciation over the last 12 months, although the Pacific and Mountain divisions experienced only modest growth," said Nataliya Polkovnichenko, FHFA's supervisory economist.
Persons: Mike Blake, Nataliya Polkovnichenko, Amina Niasse, Paul Simao Organizations: REUTERS, Federal Housing Finance Agency, Thomson Locations: Rancho, San Diego , California, U.S, New England, Chicago, Cleveland
Consumers Are Growing More Pessimistic About the Economy
  + stars: | 2023-09-26 | by ( Tim Smart | Sept. | At A.M. | ) www.usnews.com   time to read: +3 min
Consumers are growing more pessimistic about future prospects for the economy, according to the latest survey from the Conference Board released on Tuesday. “Consumer confidence fell again in September 2023, marking two consecutive months of decline,” said Dana Peterson, chief economist at the business organization. “September’s disappointing headline number reflected another decline in the expectations index, as the present situation index was little changed. “Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular,” Peterson added. “Consumers also expressed concerns about the political situation and higher interest rates.
Persons: , Dana Peterson, , ” Peterson, “ Consumers, Kelly Mangold, Lisa Sturtevant Organizations: Conference, , Federal Reserve, Census Bureau, U.S . Department of Housing, Urban Development, Real Estate Consulting, MLS, American Financial Corporation
Home prices rose 0.6% in July, holding their own amid high mortgage rates and a low supply of houses for sale, according to the S&P CoreLogic Case-Shiller Index released on Tuesday. On an annual basis, the national index is now up 1% from a year ago. “Areas in the Midwest continue to lead the national gains given their relative affordability. Markets that saw home prices reset following the recent surge in mortgage rates are expected to see stronger gains over the next 12 months, particularly those in the West,” Hepp added. While mortgage rates that have recently topped 8% for a 30-year fixed rate loan are dampening demand, a shortage of homes for sale is keeping prices high.
Persons: , Craig J, Lazzara, ” Selma Hepp, ” Hepp, Today’s, Danielle Hale, Locations: Chicago, Cleveland, New York
And the US economy’s surprising resilience, despite 11 rate hikes, has raised hopes of a soft landing becoming a reality. “I’ve always thought that the soft landing was a plausible outcome, that there was a path to a soft landing,” he said. But historical records show that a soft landing has only occurred once in the 1990s, or perhaps even a handful of times. The US Commerce Department releases its final estimate of second-quarter gross domestic product. The US Commerce Department releases August data on household income, spending, and the Fed’s preferred inflation gauge.
Persons: it’s, Jerome Powell, Powell, “ I’ve, , , Powell’s, ” “ Jerome Powell, ” Quincy Krosby, Krosby, ” Krosby, Matt Egan, ” Neil Bradley, “ We’ve, Read, Christine Lagarde, Michelle Bowman, Austan Goolsbee, Lisa Cook, John Williams Organizations: CNN Business, Bell, DC CNN, Fed, LPL, CNN, Corporate, US Chamber of Commerce, European Central Bank, Costco, Global, Board, Survey, US Commerce Department, Micron, Nike, US Labor Department, National Association of Realtors, Carnival Corp, University of Michigan, New York Fed, China’s National Bureau of Statistics Locations: Washington
This means mortgage rates are likely to stay near their current levels, barring any changes in the current economic outlook. Average 30-year mortgage rates will likely continue to hover right around 7% for at least the next few weeks. We'll also likely see mortgage rates drop once the Fed starts cutting rates, though that might not be until later next year. But whether mortgage rates will drop in 2023 hinges on if the Federal Reserve can get inflation under control. This means your entire monthly mortgage payment, including taxes and insurance, shouldn't exceed 28% of your pre-tax monthly income.
Persons: Selma Hepp, We'll, There's, you'll, Fannie Mae Organizations: Federal Reserve, Fed, Zillow, Mortgage, Association, Sky Locations: Chevron
Halfway through 2023, mortgage rates are still elevated compared to the last decade. It's not likely that interest rates will come down this year; Selma Hepp, the chief economist at CoreLogic, expects the year to end with mortgage rates at 6.7%. That's up from her forecast in April that saw the year ending with mortgage rates near 5.8%. "And I think with lower mortgage rates, we will see a lot of pent-up demand coming in." This year, appreciation has largely been a function of low inventory, though elevated mortgage rates are helping to mute that increase.
Persons: It's, Selma Hepp, Hepp Organizations: Federal Reserve, Treasury
Price growth for US homes bounced back this summer from its lowest level in over a decade, according to a new report from real estate data provider CoreLogic. Rising mortgage rates have hurt mortgage demand. 10 undervalued markets for homebuyers to look in nowIn addition to sharing their latest Home Price Index report, CoreLogic also shared exclusive data with Insider about which US housing markets are most undervalued right now. Below are 10 undervalued metropolitan areas in the US, according to CoreLogic, along with each's home price index change from the last 12 months as of July and forecasted home price index change. The cities are listed in descending order by expected home price index change.
Persons: Price, Selma Hepp, Hepp, CoreLogic Organizations: Mortgage, New, West : Locations: California , Washington, Massachusetts, Miami , Florida, St, Louis , Missouri, Detroit , Michigan, Northeast, Vermont, New Hampshire, New Jersey, West, West : Idaho, Nevada, Montana, Washington, Arizona, Utah, Oregon, Colorado, Texas, Wyoming, California, CoreLogic
Selma Hepp renovated a converted garage in her Burbank backyard and now rents it on Airbnb. The state has passed a series of laws allowing for, and in some cases helping pay for, ADU construction. Courtesy of Selma HeppEighteen months into the process, Hepp finally had drawings from a different architect. During the course of construction, Hepp started dating someone new, and they ended up buying a home in Mid City, a neighborhood in Central Los Angeles. She also managed to refinance her mortgage a few times over the past several years and pays $2,700 a month, which is now covered by her ADU's rental income.
Persons: Selma Hepp, Hepp's, Hepp, It's Organizations: Service, Terner Center, Housing Innovation, University of California, Construction, Hollywood, Universal, Burbank Studios, Warner Bros . Locations: Burbank, Wall, Silicon, Burbank , California, Croatia, California, Berkeley, Los Angeles, Mid City, Central Los Angeles
After first spiking above 7% earlier this month, 30-year mortgage rates are back down and hovering just under 7%. The June CoreLogic S&P Case-Shiller Index data, released Tuesday, showed that high mortgage rates are continuing to affect home prices. See more mortgage rates on Zillow Real Estate on ZillowMortgage CalculatorUse our free mortgage calculator to see how today's mortgage rates will affect your monthly and long-term payments. 30-Year Fixed Mortgage RatesLast week, the average 30-year fixed mortgage rate was 7.23%, according to Freddie Mac. 15-Year Fixed Mortgage RatesThe average 15-year fixed mortgage rate was 6.55% last week, according to Freddie Mac data.
Persons: CoreLogic, Selma Hepp, Freddie Mac, it's Organizations: Zillow Locations: Chevron
After falling nearly 7% from a cycle high in June 2022 - well short of predictions made late last year for a 12% peak-to-trough fall - average house prices started rising again in February and are now only around 1% below their peak. "While we expect house prices to lose some of their recent momentum, the worst of the correction appears to have passed and we don't expect further sustained declines," said Andrew Burrell, chief property economist at Capital Economics. Average house prices were forecast to stagnate in 2024 despite predictions for a rate cut by the middle of the year. They were forecast to average 4.17 million units in the second half of this year, lower than 4.27 million in the previous poll. Despite a near 45% pandemic-era rise in house prices and the market starting to climb again, respondents were equally split on what would happen to purchasing affordability for first-time homebuyers over the coming year.
Persons: Octavio Jones, Andrew Burrell, Brad Hunter, Hunter, Prerana Bhat, Indradip Ghosh, Pranoy Krishna, Ross Finley, Sharon Singleton Organizations: REUTERS, Reuters, Federal Reserve, Capital Economics, Hunter Housing Economics, Thomson Locations: Tampa , Florida, U.S
Below, we've compiled stories with tips for prospective homeowners, investors, and renters. And for those opting to continue renting since this path is increasingly cheaper than taking on a new mortgage payment, one piece shows where rents are falling the fastest. Sean Pavone/ShutterstockThis list from Scholaroo shows where prospective homeowners can find the cheapest combo of prices and property taxes relative to local incomes. John M Lund Photography Inc/Getty ImagesThis piece on an analysis by CoreLogic shows where investors are betting on most right now. Earlier in August, Goldman Sachs said they expect home prices on a national basis to grow another 1.8% this year.
Persons: we've, Goldman Sachs, hasn't, Sean Pavone, El Paso , Texas Denis Tangney Jr, Alan Diaz, Doug Ressler, John M, David Greene Organizations: CoreLogic, Service, AP, Kansas, John M Lund Locations: Wall, Silicon, El Paso , Texas, Kansas City , Missouri, Scholaroo
US home prices show signs of stabilizing, reports show
  + stars: | 2023-08-29 | by ( Amina Niasse | ) www.reuters.com   time to read: +2 min
REUTERS/Octavio Jones Acquire Licensing RightsNEW YORK, Aug 29 (Reuters) - U.S. housing prices showed further signs of stabilizing in June, according to two reports out Tuesday that signaled the lengthy run of softening sales prices may be bottoming out. Both reports showed prices rose modestly month-over-month. House prices rose 3.0% between the second quarters of 2022 and 2023, FHFA said. FHFA's data showed June’s year-over-year gains were strongest in the East North Central and New England regions, up by 5.4% and 6.8%, respectively. On a city basis, the Case-Shiller data showed Chicago and Cleveland experiencing the greatest price accelerations.
Persons: Octavio Jones, FHFA, , Anju Vajja, ” Craig Lazzara, DJI, Amina Niasse, Safiyah Riddle, Andrea Ricci, Leslie Adler Organizations: REUTERS, Federal Housing Finance Agency, Federal Reserve, FHFA’s Division of Research, Statistics, East North, Thomson Locations: Tampa , Florida, U.S, “ U.S, East North Central, New England, Chicago, Cleveland
Washington, DC CNN —Home prices rose again in June, marking the fifth successive month of gains, and remaining near the all-time highs notched a year ago. Prices rose 0.7% from the month before, according to seasonally adjusted data from the S&P CoreLogic Case-Shiller US National Home Price Index released Tuesday. While home prices have remained strong in 2023, stubbornly high mortgage rates complicate the situation for potential homebuyers, said Selma Hepp, CoreLogic’s chief economist. Home prices in San Francisco were down 9.7% from a year ago and Seattle prices fell by 8.8%. “Many existing homeowners remain on the sidelines of the market, content to stay put as mortgage rates reach 20-year highs,” said Jones.
Persons: , Craig Lazzara, Selma Hepp, Hannah Jones, Freddie Mac, Jones Organizations: DC CNN, Realtor.com, ” Builders, Locations: Washington, , Midwest, New England, Cities, Chicago, Cleveland, New York, West, San Francisco, Seattle
Investors and economists are bullish that consumer spending, the US economy’s main engine, won’t deteriorate too much, which should help stocks avoid a massive sell-off this year. The US Labor Department releases July figures on job openings, quits, hires and layoffs. The US Commerce Department releases July data on household spending, income and the Fed’s preferred inflation gauge. The US Labor Department reports the number of new applications for jobless benefits in the week ended Aug. 26. Friday: The US Labor Department releases August figures on the labor market, including monthly payroll gains, wage growth, and the unemployment rate.
Persons: “ We’re, we’ve, ” Matthew Palazzolo, we’re, We’re, ” Palazzolo, pare, It’s, Biden, Jerome Powell, Sinead Colton Grant, Anna Cooban Organizations: CNN Business, Bell, DC CNN, Federal Reserve, US, Bernstein Private Wealth Management, CNN, Nvidia, Research, Fed, Kansas City, San Francisco Fed, Mellon, International Monetary Fund, Global, US Labor Department, Board, US Commerce Department, National Association of Realtors, China’s National Bureau of Statistics, P Global, Institute for Supply Management Locations: Washington, Wells Fargo, Jackson Hole , Wyoming, American, Germany, Europe, Berlin
Lowe's reported mixed fiscal second-quarter results on Tuesday, as consumers tackled springtime projects and helped offset weakening home improvement demand. It anticipates total sales will range between $87 billion and $89 billion for the period. It projects comparable sales will drop by 2% to 4% this fiscal year. Lowe's is more reliant on do-it-yourself shoppers for its sales than Home Depot is, but has tried to change that. Only about a quarter of Lowe's sales come from home professionals, while Home Depot typically gets about half of its sales from them.
Persons: Lowe's, Richard McPhail Organizations: Lowe's, Home, U.S . Mortgage Locations: Bloomsburg
For people on Maui and across the US, climate change is making the affordable housing crunch even worse. “This is why they have been building these affordable housing buildings. It is a safe place, but it doesn’t feel like home.”Affordable housing picture on Maui was already ‘pretty grim’For people on Maui and across the US, climate change is making the affordable housing crunch even worse. But not fires damaging buildings and taking lives.”“The affordable housing picture was pretty grim on Maui even before the fire,” he said. “There was more than one kitchen, more than one family living there.”These types of cobbled-together solutions to affordable housing are now gone, as are other recent hard-won affordable housing projects.
Persons: Josh Green, Hannah Harris, Tony Ellett, , Harris, , ” Harris, Ellett, Jae C, Shantal Catanach, Keanu, ” Catanach, she’s, Stan Franco, Franco, , Diane Yentel, ” Yentel, Yentel, Hurricane Sandy, Sandy, Peter Niess, Justin Sullivan Organizations: DC CNN, Urban Institute, UN, University of Hawaii’s Economic Research Organization, US Bureau of Labor Statistics, NOAA National Centers for Environmental, Joint Center for Housing Studies, Harvard University, Income Housing Coalition, Federal Deposit Insurance Corporation, Hurricane, Maui Architectural Locations: Washington, Maui, Lahaina, Catanach, Maui County, Hawaii, Corelogic, Maui –, Lahaina , Hawaii
When it comes to single-family homes, it's predominantly investors, according to recent data from CoreLogic, a property-data firm that tracks real-estate transactions. But whether they are small or large investors, they are targeting specific areas, according to the data. "All the others make sense as these have been hot real estate investment areas that have been hot for a very long time in terms of investment. Small investors are active all around the country and make up most of the investors, he said. The below table is based on CoreLogic public records data for single-family transactions.
Persons: Thomas Malone, Goldman Sachs, who's, Malone, upticks, There's Organizations: CoreLogic, Investor, Mega, McAllen, El, San Bernardino -, Thousand Oaks, Beaumont, UT, KS Locations: CoreLogic, California, Jose, Sunnyvale, Santa Clara, CA, Angeles, Long, Anaheim, Edinburg, Mission, Brownsville, Harlingen , TX, Atlanta, Sandy Springs, Roswell, Francisco, Oakland, Hayward , CA, El Paso , TX, Diego, Carlsbad, Fresno, Modesto, Riverside, San Bernardino, San Bernardino - Ontario, Oxnard, Ventura, Santa Rosa, Stockton, Lodi , CA, Albuquerque, NM, Port Arthur, TX, Memphis, TN, Salt Lake City, Christi , TX, Wichita
Total: 25