From Yahoo Finance:
Shiller: Trump is a ‘psychological boost’ to the housing market
“I describe the current boom in U.S. home prices as the third largest boom since 1890. And so it’s big, and people are starting to think that housing is expensive, and that could lead to a turnaround and a drop in home prices,” Shiller said in an interview with Yahoo Finance at the World Economic Forum in Davos, Switzerland. “But I’m not ready to forecast that yet.”
Shiller pointed out that the National Association of Home Builders’ monthly index of builder sentiment rose in January following two months of sharp declines, showing builders are beginning to look more favorably at housing demand. And in most cities, the S&P CoreLogic Case-Shiller data – which Shiller co-created – has pointed to continued home price appreciation, albeit at a slower pace. The 20-city home price index rose 5.03% from a year earlier in October, based on the most recent release in December, from a downwardly revised annual gain of 5.2% in September.
However, Shiller said he has taken note of the past several months of weakness in the housing market. Most recently, the National Association of Realtors’ report on Tuesday showed U.S. home sales tumbled 6.4% month over month to their lowest level in three years, far outpacing the 1.5% drop predicted by economists. This extends a trend of declines in existing and new home sales in the latter part of 2018, which occurred against a backdrop of rising mortgage rates and land and labor shortages.
“The housing market, when it starts to slow, that’s a leading indicator that it could turn down,” Shiller said.
…
“You don’t have the smart money going in and out from day to day,” Shiller said. “[The housing market] shows momentum, and that momentum is slowing down a bit. There could be a reversal in home prices and a recession. But I’m not giving it a probability of greater than 50% for this year.”The key factor leading to a contraction are changes in confidence, Shiller said. And on that front, President Donald Trump has delivered a bump to the housing market.
“I think Trump does have a psychological boost for the housing market because of who he is. He kind of exemplifies lavish living. He writes books about success. He’s our first motivational speaker president,” Shiller said. “His motivation will tell you that you have to live the life of a successful person.”
“That’s an important reason why people buy homes,” Shiller added. “They want to be part of the successful people in the country.”
What could go wrong?
“No Pay Stub? No Problem. Unconventional Mortgages Make a Comeback”
https://www.realtor.com/news/real-estate-news/no-pay-stub-no-problem-unconventional-mortgages-make-comeback/
Certain locations in the country blow the avgs up. This certainly doesn’t apply to most of nj or northeast in general. Prices haven’t doubled in most areas in the state over the last 5 years. Said this before on this blog, but when most other desirable places in what used to be low cost locations passed up north jersey prices, no longer making us look expensive, I would be very afraid of those markets. Those are the markets he is talking about. Northeast is pretty damn stable when it comes to pricing.
“I describe the current boom in U.S. home prices as the third largest boom since 1890. And so it’s big, and people are starting to think that housing is expensive, and that could lead to a turnaround and a drop in home prices,” Shiller said in an interview with Yahoo Finance at the World Economic Forum in Davos, Switzerland. “But I’m not ready to forecast that yet.”
The alt-scoring credit market is becoming very very significant.
What I mean by this are the digital focused startup players that do not give a damn about credit scores, who have developed their own internal, proprietary, highly complex scoring models that make the old FICO guys look, well, old. These guys are beginning to become hugely dominant players in nearly unknown segments. Their growth is explosive. They can not hire people fast enough to process all the loans in the pipeline. The guys building their models are actually brilliant. The amount of data they are looking at to quantify risk is absurd, models literally change in real time. Yes, your GPA and where you graduated from will impact your interest rate. Have been working with a few of these guys. If you knew how fast they were growing and how much loan volume they were processing, your jaw would drop. These guys will all completely own the millennial market, traditional banks have no chance.
Do alt-scoring lenders offer mortgages? If so, can they sell them to Fannie Mae and Freddie Mac?
Not yet, but they will. Guys like this are seriously shaking things up.
https://www.fair.com
Flexible car leasing, alt-scoring, the only way you can lease a car with them is through the mobile app. No phone, no brick and mortar, no website. It’s stupid simple, you can have a car without ever talking to someone, dealing with a dealer, etc etc. Their growth rate is insane, they can easily become the largest auto finance organization in the US in 2 years. Not only that, but their model is making the physical dealership nearly irrelevant.
Grim – The third age of credit in on the horizon.
1st age was trust (between you and your banker)
2nd age was credit as Algo which started way back in the 1950s with FICO
3rd age is now forming with things like getting paid in real time, blockchain, peer to peer lending, and AI lending as you described in startups like Kreditech.
We will see hundreds of not thousands of failures in these startups just like the coin ICOs. Heck the death of the Venezuelan State ICO Petro (PTR) tied to their currency was just sounded by Trump.
Anything that however threatens the oligarchs of Finance and our Hegemony will be bought, merged, legislated out of existence or squashed with with tanks if necessary.
99.9% of blockchain is a fraud, new cryptocurrency ICOs are all Ponzi schemes.
They’re like the Uber of lending. I can damn near guarantee NJ will outlaw this type of lending to protect car dealerships… dealer lobby in NJ will not allow it.
Will I still be able to buy a house in NJ , never make payments and live there for 10 years before I am evicted?
At my closing I joked with my lawyer and title insurance guy about creating an App for a one click close. Neither were amused at the thought of getting cut out of the action.
I would say the resistance to new finance laws will need to change for any kind of real movment to streamline housing finance with technology.
Perhaps after the next crash some Millennial Congresscritter will float the next version of a bloated Dodd Frank Law to fix housing finance that will include carve outs giveaways to the biggest PAC tech donors.
Sounds like millennials like not interacting with humans more than alt scoring. If they are doing the majority of factor scoring on anything other than credit line history and income then it sounds like a sham number to get business. You won’t see risk until next recession. Onlines degrees are available from all Ivys and any top school. Are they looking at the business school name?
Grim who is holding these mortgages?
On a bright note in China you can do nearly anything on WeChat all on one platform with a Billion users with State backing ofcourse.
If there will be a revolution in Housing Finance for example it will be there first.
Examples of what you can do in the Wechat app in China, just try doing some of these things in Facebook.
Making payments
Scheduling doctor appointments
Paying traffic fines
Bike sharing (Mobike)
Managing Credit Cards
Booking transportation
Checking crowd density
Searching for online trends
Making contributions (‘Donate Your Step’)
Business communication and tracking
Calling landlines or other mobile devices
Virtual Reality
Purchasing insurance
Regarding “Fair”, my son in S.F. talked to me about this. Makes sense for when he has consulting gigs in other parts of Cali. Also would be useful for my daughter in school in N.C. if she needs a car for part time work or internships.
Since cars spend 99% of their time parked, ownership really is a drain on long term savings and finances, especially American’s tendencies to over spend on autos.
David Neeleman (Jet Blue founder) is starting a new airline. Currently called Moxy, apparently it launches next year. As a customer, you will do everything from an app. Given that facial recognition is coming to airports rapidly, it all plays into his model. No phone #s, agents etc. Assume AI & Robots for baggage handling.
PS – any suggestions how, where and what to donate to help NJ FBI agents. D or R doesn’t matter, groceries cost the same and these folks need a hand.
Kind of separate from treasuries, CD yields are dwindling. I was able to by 2.65-2.75% yield 1 year CDs just a few weeks ago. Now 2.5% is the current rate, down 25 basis points. Canary in a coal mine?
Nationalize Facebook and we can have the same thing.
The great job market myth continues. Still keeping conversations open with recruiters. Rate quoted at end. It is an embarrassment what corp America is trying to people these days.
$55/hr on W2 All Inclusive
Sent: Thursday, January 24, 2019 12:20 AM
To:
Subject: Re: Very Urgent opening for Program Manager in NY
Can I ask rate?
From:
Sent: Wednesday, January 23, 2019 3:56 PM
Subject: Very Urgent opening for Program Manager in NY
Hello ***,
Greetings!!
Role: Program Manager
Location: NYC, NY
Long Term Contract
15+ Yrs Experience with PMP / Prince2 / PSM or equivalent certification
•Must have experience managing large Transformational programs in Banking / Wealth Management
•Interact with project managers, Architects, Business Analysts, sponsor and manage their expectations & demands the program manager needs to find a balance among the conflicting demands.
..etc, etc. Rate was $55 hr on W2. Last three contacts were similar Sr IT project roles in NYc at Evercore and Time Warner. Respective rate quotes were 80 and 70 hr with no benefits. Just pathetic. Trump should focus on H1 reform rather than stupid wall.
Considering all of the unnecessary scrutiny they’ve been under, I think Zuckerberg should announce a symbol change on Facebook from FB to FU.
I don’t think in my entire life I’ve seen significant amounts of snow and ice melt as fast as today.
Fair is going to be huge.
Low balling. No different than low balling in the housing market. Anyone that takes this is the problem. They are the sucker ruining it for everyone else.
Bystander says:
January 24, 2019 at 9:59 am
The great job market myth continues. Still keeping conversations open with recruiters. Rate quoted at end. It is an embarrassment what corp America is trying to people these days.
$55/hr on W2 All Inclusive
My sister works for this company. I doubt they hit critical mass, but it’s a nice start.
https://edition.cnn.com/interactive/2019/01/business/loop-reusable-packaging-mission-ahead/index.html
Bystander, you’re seeing the hallmarks of those jobs going to Asia. Happened in IT. Check job listings, speak to recruiters, see job openings where they want you to do the job of 3 people and have senior level abilities in each, pay scale was an absolute joke. Job listing agency then can claim they cannot find any American willing to do the work, and they bring in a H1-B, or just farm it out to faceless teleworkers in India or Vietnam or the Philippines. Start boning up on new skills.
I saw a milk delivery truck the other day….
This will blow up in their face eventually. Sure, it’s perfectly logical to assume someone will continue to do the work of 3 people at levels of pay that is pathetic. People are their own worst enemy. And what kind of work quality do you expect under this equation…..it’s a recipe for disaster long term, esp if it’s a skilled field. They will f up your business to no end, and you will be stuck with the long term costs of fixing it all. NO MONEY SAVED LONG TERM. It’s the equivalent of hiring a cheap hack to do plumbing in your home. It will be okay in the short term, but better believe they f’ed something up on your house. You are not saving money long term with this approach, just an expensive headache.
That’s why you can low ball houses over and over until you find a sucker. They are doing the exact same thing here with workers, and the idiots keep letting them win. Would love to smack some sense into these idiots.
We don’t actually have to form unions, you just have to come together and stop working for so cheap. This applies to all human beings, in all fields.
Bruiser says:
January 24, 2019 at 11:05 am
Bystander, you’re seeing the hallmarks of those jobs going to Asia. Happened in IT. Check job listings, speak to recruiters, see job openings where they want you to do the job of 3 people and have senior level abilities in each, pay scale was an absolute joke. Job listing agency then can claim they cannot find any American willing to do the work, and they bring in a H1-B, or just farm it out to faceless teleworkers in India or Vietnam or the Philippines. Start boning up on new skills.
Not a fan of her at all, but this is a good read. Makes some good points about inequality and democracy. Something has to be done, can’t kid ourselves. Our country might not survive this if we continue down this road.
Alexandria Ocasio-Cortez’s Tax Hike Idea Is Not About Soaking the Rich
https://www.nytimes.com/2019/01/22/opinion/ocasio-cortez-taxes.html
My sister works for this company. I doubt they hit critical mass, but it’s a nice start.
https://edition.cnn.com/interactive/2019/01/business/loop-reusable-packaging-mission-ahead/index.html
Libturd,
I love the idea. But it has to come hand in hand with curtailing disposable use.
Which will lead to rednecks stockpiling red Solo cups, probably.
Bruiser,
I handle work force plan for 120 perm and Wipro resources. Quite honestly, the level of work is insane due to quitting, med problems, performance issues and Visa issues. We have resources in India, a few in Europe and a handful in US. I have to move 4 people out of Europe as they are Indian and visas are expiring. We have them to move back to Pune (arrange seating) then move back to Europe for a short term. They want all out of Europe by end of year. All this to avoid hiring at all in US and Europe “high cost locations”. We also are involved in group rollout of agile which has no framework or standards outside a PowerPoint deck. Their chief reason is that “business do not know their requirements”
so SDLC process is too long thereforee we need to pressure IT to keep having releases until business gets it right. In other words, we fired the SMEs moved roles to Poland and India and now have no idea what we are doing…IT fix that by killing yourselves with 4 am global scrum meetings and stressful release schedules
Insanity….
We need to focus on long term and not the short term…..It’s turning into a disaster.
“so SDLC process is too long thereforee we need to pressure IT to keep having releases until business gets it right. In other words, we fired the SMEs moved roles to Poland and India and now have no idea what we are doing…IT fix that by killing yourselves with 4 am global scrum meetings and stressful release schedules”
Bring back the milk man….or maybe even…the mile carton
Bystander, but the SVP who implemented it declared it a success and got a sweet bonus. You never hear him on those 4am fire drill conferences though.
Spy Case Linked to China Raises Red Flags for Poland and the U.S.L
https://www.wsj.com/articles/spy-case-linked-to-china-raises-red-flags-for-poland-and-the-u-s-11548357192?emailToken=7f0290b346d36c56e337da88f710cb0fErJJc6sUjFL7rxGEqTOaVCrc37tMlvIf6Ku+lLRM9I2+4ES6B0GTSCyx+P64FEOVKEu1wl1lBj4D2XiFJefuiBK0cBGoNhEf2BXAQ+8yZ6wJ/pdPJQ31XCDHtW0B/RgO&reflink=article_copyURL_share
From that nyt article I sent earlier…how can one argue with this?
“But redistribution alone will not be enough to address the inequality challenge of the 21st century. All societies that have successfully tamed inequality have done so mostly by curbing the concentration of pretax income — the inequality generated by the markets — for the simple reason that extreme market inequality undermines the very possibility of redistribution. Tolerating extreme inequality means accepting that it’s not a gross policy failure, not a serious danger to our democratic and meritocratic ideals — but that it’s fair and just and natural. It produces its own self-justifying ideology. It vindicates the “winners” of world markets. But vindicated winners, sure of their own legitimacy, seldom share much of their “just deserts” with the rest of society.
An extreme concentration of wealth means an extreme concentration of economic and political power. Although many policies can help address it, progressive income taxation is the fairest and most potent of them all, because it restrains all exorbitant incomes equally, whether they derive from exploiting monopoly power, new financial products, sheer luck or anything else.
A common objection to elevated top marginal income tax rates is that they hurt economic growth. But let’s look at the empirical evidence. The United States grew more strongly — and much more equitably — from 1946 to 1980 than it has ever since. But maybe in those years the United States, as the hegemon of the post-World War II decades, could afford “bad” tax policy? Let’s look then at Japan in 1945, a poor and war-devastated country. The United States, which occupied Japan after the war, imposed democracy and a top marginal tax rate of 85 percent on it (almost the same rate as at home — 86 percent in 1947). The goal was obviously not to generate much revenue. It was to prevent, from that tabula rasa, the formation of a new oligarchy. This policy was applied for decades: In 1982, the top rate was still 75 percent. Yet between 1950 and 1982, Japan grew at one of the fastest rates ever recorded (5.1 percent a year per adult on average), one of the most striking economic success stories of all time.
Contrast Japan in 1945 with Russia in 1991. When Communism fell, Russia was also a poor country, with income and life expectancy well below that of Western economies. In lieu of 85 percent top rates, however, Russians got fast privatization and a top tax rate of 30 percent — again modeled on what was prevailing in the United States at the time (31 percent in 1991). That rate was replaced in 2001 by an even lower flat rate of 13 percent. That shock therapy created a new oligarchy, led to negative income growth for the bottom half of the population, fostered a general discontent with democracy and produced a drift toward authoritarianism.
Progressive income taxation cannot solve all our injustices. But if history is any guide, it can help stir the country in the right direction, closer to Japan and farther from Putin’s Russia. Democracy or plutocracy: That is, fundamentally, what top tax rates are about.
Emmanuel Saez and Gabriel Zucman are professors of economics at the University of California, Berkeley, and the authors of a forthcoming book about tax justice.”
I just can’t find myself to disagree with it. No one deserves to have so much power over everyone else…no one.
So if it means putting in a high percentage tax to curtail power that comes from money, so be it. And if they are taxed the same as everyone else before that 10 million mark, how is it so unfair? Still killing it, but not killing it at a point where it gives you unlimited power over everyone else.
If you are for freedom of the individual, then you should be against people building up wealth over a 100 billion dollars. They have unlimited power at the expense of everyone else’s freedom. They will act on said power.
Interesting comment from that article.
“The right is frightened of her. Through the use of social media she has educated her young and old followers about how the middle class was born and destroyed. FDR started the social security system, unemployment insurance, the minimum wage and federal work programs, Social!sm at its best. Why did FDR do it? He was pushed from below from people that identified from the one Commun!st Party, the two Social!st party’s and the unionists. He understood in order to save capitalism from its own destructive nature he had to give the people something back. How did he pay for it? He raised taxes on the wealthiest Americans and corporations to the 70% on the highest tax bracket. Hence the middle class was born, he won four presidencies. He later said his greatest achievement was saving capitalism. After his death the capitalist seized on a divide and conquer strategy, first go after the commun!st, then the social!sts, then the unionists, it worked very well. The Taft Hartley act of 1947 was quickly put in place limiting the powers of unions and the political parties that their leaders could belong too. The corporate oligarchs wanted their power and money back, hence the decline of the middle class. Capitalism in its present form is in the last throes of life. They are now consuming all smaller companies and the middle. In fact they have infiltrated government and are dismantling it from within and enriching themselves on what was once the peoples pride and property, Via privatization.”
I think this does a good job of explaining what we need. This person gets it. It’s not about “out to get the rich.” It’s about what works best for our economy and the individual in the end.
“One can have high income and be deep in debt. One can have significant net wealth and have no taxable income. One can spend like crazy and pay no taxes. The ideal tax system would encourage the gradual accumulation of retirement assets over a lifetime (perhaps a million dollars for a couple), tax businesses fairly (Value Added Tax is the world’s standard) and tax all income the same (no tax expenditures) but with lower rates for those with low net wealth (i..e. giving a break to those with mortgages and collage loans).
The author contends that “The inequality of pretax income shrunk dramatically” but ignores that fact that the wealth gap expanded dramatically. The wealthy avoid tax on wealth accumulation thanks to an antiquated Supreme Court decision that prevented the IRS from taxing unrealized capital gains. This does not mean that inverse taxation of wealth and income would be prohibited – especially where those with net worth under a million or two would want to pay a maximum wealth tax (i.e. perhaps 2%) in exchange for no payroll taxes and low, income tax rates (i.e. perhaps 8%).
“Excessive income concentration” is not a problem until there is a concentration of both net wealth and income. Let the young and successful start-ups earn some significant money and let them pay higher income tax rates as they accumulate more than is necessary for a modest middle-class retirement. Both success and mobility need to be rewarded by the tax code.”
“The issue here is political power. When a person becomes ultra wealthy, how much enjoyment can additional money bring? How many bathrooms can you use in one day? How many kitchens? How many mansions can you sleep in? How many rooms in a 30,000 sq. ft. house can you even use?
No, the entire point of low taxes for phenomenal incomes is to create the establishment of a wealth aristocracy which is exactly what the Republicans want. This gives them a small group they can cater to for enormous political funding.
Just as important to their plan is the elimination of the estate tax. This is the big lever of power. Eliminating this tax allows dynasties to form. Those are real aristocracies. People, by virtue of their lineage, get to rule the nation through their inheritance. Again, this is exactly what the Republicans want. This is the essence of trickle down, supply side economics. The money doesn’t trickle anywhere. It stays in the pockets of the super rich.
This all started with Reagan. He wanted the upper crust to have the power. His victory for them and the GOP, is that they have convinced the working class that such policies are good for them too. They most certainly are not. Now we have Trump, who has managed to convince the “left behind”, that we need a wealthier, wealth aristocracy and they fell for it.”
Gottheimer in December 2017 said Trump tax reforms will kill home prices in 2017.
https://www.youtube.com/watch?v=HUSG5XIOGcU
The data is in and New Jersey house prices spiked following signing of the tax reforms. The predictions of 2017 made by politicians and the media failed to materialize.
Year-over-year change in New Jersey house prices:
2012 0.0%
2013 +3.0%
2014 0.0%
2015 0.0%
2016 -1.6%
2017 +1.0%
2018 +5.0%
Above should say kill home prices in 2018, not 2017.
Jersssssey baby.
6:01:
I suspect the full picture on the impact of the SALT limitation will happen this tax season. Let’s see how the prices and sales hold up through the summer.
Tom, on December 29 ,2017,I predicted -0.3% in 2018 in part because of SALT impact, but values went higher, especially in Hudson County. I don’t expect another +5% year. Housing is slowing nationally, including in Texas were housing demand is growing, state income tax is zero, and local property taxes are moderate.
What is true is the panic of the NAR and the politicians they own was too much.
Down on the RT 1 corridor near Princeton this morning..
grim, if you get the chance. La Taqueria in Lawrence on 206….Tiny Mexican taco joint.
Absolutely phenomenal.
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To be FAIR:
For kicks, I installed the FAIR app yesterday and decided to take a look at some used minivans. That’s for my ‘landlording’ business. Actually, second grandchild was born yesterday, so well, you know what I mean.
Either way, FAIR got my license and some other stuff and gave me a 4 digit monthly maximum payment per month. Hey Guys! I’m retired. No way am I going there. So, I put in the specifics for what I’m looking for. I find a couple in the $250-350 range nearby. Looking close at the numbers, they also want about $1300 up front. I never do that. When I lease, it’s always $0 down or nogo. Ask me why.
Turns out, I traced the car ownership to a used car dealer. They are selling the car also outright about $15-17K. Hmmm.
So, Grim, I don’t think this affects the NJ dealer lobby, as most obvious, they are in this together. Don’t think it’s gonna be a game changer.
I don’t even know how the insurance companies will look at this. Closer to a lease, I assume.
FlabMax makes a public appearance:
https://nypost.com/2019/01/25/college-fires-professor-accused-of-giving-nazi-salute/
I don’t know, I have to believe the source of this pause is psychological. It makes no sense that demand is growing along side a healthy job market in a strong economy, and you have home sales declining. Makes absolutely no sense at all….defies logic. This has to be an illogical move by the market, no way around it. All the negative headlines to take down trump must be having an impact on the minds of the buyer. These are good times, why are we acting like it is not?
“Housing is slowing nationally, including in Texas were housing demand is growing, state income tax is zero, and local property taxes are moderate.”
“Market Performance Gap
The market for existing-home sales is underperforming its potential by 7.4 percent or an estimated 457,000 (SAAR) sales.
The market performance gap decreased by an estimated 66,000 (SAAR) sales between October 2018 and November 2018.
Chief Economist Analysis: Home Sales Decline, But Prices Rise?
“In November, the housing market underperformed its potential by 7.4 percent, marking 40 straight months the market remained below its potential, according to our Potential Homes Sales Model,” said Mark Fleming, chief economist at First American. “Month over month, the gap between actual existing-home sales and the market potential for home sales narrowed by 1.2 percent, but the housing market still has the potential to support more than 457,000 additional home sales at a seasonally adjusted annualized rate (SAAR).
“While existing-home sales underperformed potential throughout 2018, house price appreciation has continued to make significant gains this year,” said Fleming. “Why are home sales declining, but house prices rising? This may be counter-intuitive to some, but declining home sales and rising house prices is not a surprising phenomenon because mortgage rates have been rising. The Fed has been raising rates for almost two years after a long stretch where monetary policy was geared to keep rates near historic lows.”
“Higher mortgage rates impact both housing supply and demand. Current homeowners and prospective home buyers alike are experiencing a 30-year, fixed-rate mortgage close to 5 percent for the first time in eight years,” said Fleming. “Higher mortgage rates reduce affordability for the first-time home buyer, constricting demand. But, higher mortgage rates also create a financial disincentive for existing homeowners with low rates on their existing mortgages from selling their homes, thus limiting supply. Existing-home sellers are also home buyers, so the financial disincentive from higher mortgage rates impacts both sides of the supply and demand dynamic.”
What Can We Learn From Previous Rising-Rate Eras?
“Yet, existing-home sales don’t always slow down when mortgage rates rise,” said Fleming. “Existing-home sales trends are often more influenced by why mortgage rates are rising. Looking back over the last 25 years, there have been seven significant rising mortgage rate eras.
“There are two examples where rising mortgage rates led to declining existing-home sales. From late 1993 to the end of 1994, the Fed increased the benchmark federal funds rate to manage inflation,” said Fleming. “The increase caused mortgage rates to jump to more than 9 percent. While it took eight months before there were any negative consequences to existing-home sales, they eventually declined by approximately 5 percent.
“The largest decline was between 2005 and 2006. Rising mortgage rates in that period were driven by the Fed’s efforts to cool the over-heated housing market and tame above-target inflation,” said Fleming. “The Fed’s moves worked, as existing-home sales declined by more than 10 percent over the course of a year.
“However, other than these two examples and the most recent increase in mortgage rates, existing-home sales have shown to be relatively resistant to rising-rate environments,” said Fleming. “For example, mortgage rates spiked in the summer of 2013 when the Federal Reserve indicated it would taper its quantitative easing policy of buying Treasury bonds and mortgage-backed securities. But, this ‘taper tantrum’ had no negative impact on existing-home sales.
“It appears that the duration of the rising-rate era is important. The longer the rising-rate era lasts, the more likely there will be a decline in existing-home sales,” said Fleming. “Today, as mortgage rates have increased, existing-home sales have fallen. But, this time, the unwillingness of existing homeowners to sell as mortgage rates have increased is driving the decline in existing-home sales.”
Strong Economy, Millennial Demand Mitigate Rising Mortgage Rates
“While rising mortgage rates may be indirectly responsible for today’s shortage of housing, they have not always meant a decrease in existing-home sales. Each rising rate environment is different and driven by various economic events and conditions,” said Fleming. “Additionally, changing mortgage rates don’t change the other fundamentals – a thriving economy and rising millennial home buyer demand continue to underpin today’s housing market.”
What Insight Does the Potential Home Sales Model Reveal?
“When considering the right time to buy or sell a home, an important factor in the decision should be the market’s overall health, which is largely a function of supply and demand. Knowing how close the market is to a healthy level of activity can help consumers determine if it is a good time to buy or sell, and what might happen to the market in the future. That’s difficult to assess when looking at the number of homes sold at a particular point in time without understanding the health of the market at that time,” said Fleming. “Historical context is critically important. Our Potential Home Sales Model measures what home sales should be based on the economic, demographic and housing market environments.”
https://www.businesswire.com/news/home/20181217005151/en/Strong-Economy-Millennial-Demand-Housing-Market-Rising
re: Texas – I have family there the drilling and fracking boom is still going on and the population is increasing. There is a shortage of good used housing for sale inventories are low on blue collar housing sub $200k homes.
Maybe this is the source? Just trying to make sense of this.
“Today, as mortgage rates have increased, existing-home sales have fallen. But, this time, the unwillingness of existing homeowners to sell as mortgage rates have increased is driving the decline in existing-home sales.”
Juice,
Your post lines up with my post at 10:06. People are not selling. They are staying in place.
re: ” the unwillingness of existing homeowners to sell”
No more trading up? End of the McMansion?
And it begins. FAA shut down Laguardia not enough air traffic controllers. If Congress cannot get their act together soon this will spread.
This is what I have been saying for years….thriving economy and rising millennial buyer demand. How in the world are people calling for a major recession in 2020 or 2021 right when millennial demand starts going into overdrive? The experts are insane to take this position in 2020/2021.
“While rising mortgage rates may be indirectly responsible for today’s shortage of housing, they have not always meant a decrease in existing-home sales. Each rising rate environment is different and driven by various economic events and conditions,” said Fleming. “Additionally, changing mortgage rates don’t change the other fundamentals – a thriving economy and rising millennial home buyer demand continue to underpin today’s housing market.”
Have to agree.
“I think the median family income (currently about $60K in the US) is a meaningless statistic for this purpose. That number includes the poor, retirees whose income is lower or are living on Social Security, and other demographic groups who are, generally, not considered potential home buyers for income purposes. People with substantial incomes or those with cash from a previous home sale are the market.”
Looking at the fair website, What is the end game? You pay the upfront cost, then a month payment until you decide to move on? What happens when the car craps out? There seems to be no term limit or the possibility to own the car.
22 homes in attorney review and 72 under contract in Wayne.
So much for 2019 being a slow market.
Lincoln Park…. 1/5th of houses on the market are in review.
Good luck with falling prices.
contacts from Trenton who HATE Chris Christie and thought he was a disaster, say Murphy is much worse….
“Affordability has been blamed for slower sales over the past six months, but sales in December matched the same pace as in 2000, and Yun argues that affordability is better now.
“Today it is actually more affordable compared to year 2000, yet we have about 20 million more jobs, so for home sales to be roughly equivalent means that in 2018 there is an underperformance of the overall housing sector.””
https://www.cnbc.com/2019/01/22/the-unusually-large-drop-in-home-sales-has-real-estate-agents-baffled.html
contacts from Trenton who HATE Chris Christie and thought he was a disaster, say Murphy is much worse….
Very believable. His own soccer team hates him. His hires are throwing chairs in meetings and assaulting women after events. He seems to not give a damn about anyone’s opinion, and in a bad way. Christie was just hard headed and unwilling to change his mind. Murphy seems to be of the opinion that no one else’s opinion matters.
This was brought up on 101.5 the other day. Cuomo and DeBlasio may be leftists to the core, but at least they seem to prioritize actual governing of the city and state. Murphy, we haven’t seen any accomplishments yet…but plenty of failures and gaffs.
What did you expect? Is not a left or right issue, but a boomer issue.
Murphy, the classic GS boy master of universe’s mindset, tells him that NJ was the best bet in regards to buying yourself an executive position within the 50 state liberal democratic political markets.
Two issues here.
One is NJ’s political market being the cheapest, aka – the Tuesday early afternoon dancers at the str!p club, nothing to be proud of.
Second, the gall and b@lls to be able to dream it and pull it off for pure selfish reason of political brownie points advancement to get closest to 1600 Penn without regards to damage on the way there.
Good thing is that Sweeney will do everything to make him fail. The GS gloss is over, after the first pass of a GS golden boy (Corzine).
chicagofinance says:
January 25, 2019 at 12:29 pm
contacts from Trenton who HATE Chris Christie and thought he was a disaster, say Murphy is much worse…
http://investors.mack-cali.com/Cache/1001247586.PDF?O=PDF&T=&Y=&D=&FID=1001247586&iid=103187
Leasing stats on page 24 are incredible. Normally takes 12-24 months to lease up buildings like this.
Voracious demand for high end housing in Hudson County.
Essential employees starting to call in sick?
Juice Box says:
January 25, 2019 at 10:11 am
re: ” the unwillingness of existing homeowners to sell”
No more trading up? End of the McMansion?
(trying this again)
Essential employees starting to call in sick?
Juice Box says:
January 25, 2019 at 10:15 am
And it begins. FAA shut down Laguardia not enough air traffic controllers. If Congress cannot get their act together soon this will spread.
I’m not ready to say Murphy is doing a good or bad job with only 1 year on the job.
He is being attacked by his own party for god sake. Murphy is experiencing the same exact treatment at trump did by Republicans. He is not one of the regular democrat players(establishment) in this state, and they don’t like it. They wanted their boys in his position, but murphy beat them to the position.
Let the guy have a chance. If the power players in the established political parties don’t like him, that’s fine with me. It’s exactly what I want.
Cry about raising taxes, but what has he raised taxes on? He simply put into law a more fair tax system for brick and mortar in their competition with online. What’s wrong with that?
The only thing you will nail him on is this rape case (which really has nothing to do with him…go after the prosecutors that say there is not enough evidence to take this to court….got damn witch hunt) and the winter storm that no one saw coming.
According to CBS, Trump to break and reopen govt. for a few weeks. Can’t see how Repubs will allow him to shut it down again over wall funding.
Still think Pump’s future calls are crazy? I think it’s crazy to think housing is going down this year….yet that’s the headlines. Till then, I’ll be the crazy one.
Recession is coming…lmao…talk about blind or naive.
Yo! says:
January 25, 2019 at 1:06 pm
http://investors.mack-cali.com/Cache/1001247586.PDF?O=PDF&T=&Y=&D=&FID=1001247586&iid=103187
Leasing stats on page 24 are incredible. Normally takes 12-24 months to lease up buildings like this.
Voracious demand for high end housing in Hudson County.
Time for conservatives to move back to ole, crazy Republican classic and distance themselves from the lunatic who does not believe in govt at all.
Essential employees starting to call in sick?
Produce a doctor’s note or you’re fired.
CBS News chief Washington correspondent Major Garrett reports that Mr. Trump is expected to back a continuing resolution (CR) — which would fund the government at current levels — and reopen the government for a few weeks. The border security debate will continue while the resolution is in place, but the move is designed to take the stress off the system and assure that federal workers get paid.
President Trump attempting to mitigate the damage done by the democrats. He’s willing to put country ahead of politics.
Lindsay Graham on Jan 3:
“If he gives in now, that the end of 2019 in terms of being effective president. That’s probably end of his presidency”
Now you know why nj or northeast is not busting? Looks ridiculously cheap compared to these areas.
“Many area’s need a 20-40% depreciation of their housing values. Then maybe people can afford to buy again. You actually think new couples or Millennial’s with student loan debt can afford 400-800k houses? I watched houses go from 230k to 480k in about 2 or 3 years in Colorado (Denver Metro). Average price for a house in Denver now is over $500K. Want something a bit newer (like built in the last decade or two), prepare to layout 600-800K +. Do as the experts claim and lay down 20%…yea who has $100,000 to $160,000 on hand for the down? Oh just do FHA 3% and then wonder why they have $2k-$4k a month or higher mortgages. Then add on the inflated HOA or Land Lease fees on top of the higher mortgage due to low down and PMI costs. Heck to even rent in a halfway decent area and a place that is less than 40 years old is going to cost you the same as a $300k mortgage payment…”
“@David Grey Legalizing Marijuana and all the California’s that moved there. In Cali houses were 1mil or more so when they got to CO and saw 230k houses, they bought 3 and turned them into grow houses. Now its greed. For a time houses were going before they even listed. Now I see them sitting on the market for much much longer now. Price drops are becoming common but a 2-5k drop on a 560k house isn’t going to attract many people. Problem is talking to realtors, the housing market in CO right now is a cash market. Not as many people are borrowing money like before when the housing market crashed. So while we see reports of a shrinking and even reduced housing market across the country, the Realtors say we won’t see much of a downgrade in CO since there is less borrowers and a lot more cash in the market right now. Before it was a borrowers market so when rates changed/went up and all the bad mortgages came to light, the market crashed as well.”
We can mass slaughter children in schools, kill thousands in casinos, clubs, churches and synagogues without even a discussion or thought by Rs..our national crisis is a bound woman that Trump saw on internet…or episode of Breaking bad. Sick.
Oh come on Walterwap, you think we cannot recognize that you are really Pumpkin, based on your incoherent gibberish writing?
yo! where do you get the housing data from?
President Trump attempting to mitigate the damage done by the democrats. He’s willing to put country ahead of politics.
“If we don’t get what we want … I will shut down the government. And I am proud to shut down the government for border security…. I will take the mantle. I will be the one to shut it down. I’m not going to blame you for it.”
F*CK YOU! PAY ME!
Fast Eddie says:
January 25, 2019 at 1:17 pm
Essential employees starting to call in sick?
Produce a doctor’s note or you’re fired.
Eddie, please explain how it is possible to blame this shutdown on anyone but Trump. Yesterday there were 6 Republicans who voted for the Democratic bill to end the shutdown. If the shutdown continues that number will only increase each week. Trump may finally see that he chose a losing strategy.
Fast Eddie says:
January 25, 2019 at 1:21 pm
CBS News chief Washington correspondent Major Garrett reports that Mr. Trump is expected to back a continuing resolution (CR) — which would fund the government at current levels — and reopen the government for a few weeks. The border security debate will continue while the resolution is in place, but the move is designed to take the stress off the system and assure that federal workers get paid.
President Trump attempting to mitigate the damage done by the democrats. He’s willing to put country ahead of politics.
Here’s the thing about appeasement.
You don’t gain the respect of your enemies.
You only lose the love of your friends.
SachTheGuv, here it is.
http://njar-public.stats.10kresearch.com/reports
Have to agree. Pro’s and con’s with anything. Think a lot of older generations beat up the younger generations on this issue of “screen time,” simply because they are not in touch with the world the younger generations are living in.
“6. Gen Z thinks concerns about screens are overblown
Her most recent published paper shows how the same kind of misinterpretation of data leading to bad science in other fields, from genetics to psychology, is rampant in the literature on the impact of tech on young people. The result is that much of the research on whether screen time is good or bad for children and young adults—studies go both ways—is built on unstable foundations. Depending on researchers’ pre-existing biases, “people can find what they want to find,” she says.
Some members of Gen Z are left feeling the media is obsessed with the negative impacts of tech and doesn’t talk enough about how it empowers their generation. Whether it’s helping them stay connected with friends when their helicopter parents won’t let them out of the house, says Ms. Hav-ighorst, or find people who share similar interests, says Ms. Sharp, the mobile internet is a powerful force for making this generation aware of the breadth of experi-ences of their peers.”
https://www.wsj.com/articles/generation-zs-7-lessons-for-surviving-in-our-tech-obsessed-world-11548478811?emailToken=e3653a1ffd605a6f0e877cef5bdf9e68cNkThVT4E3Dk+hMMLHDzl1aCFd4rctc3fowhKHAklIyvmtH4vMkg6VqHXXAABB7q8KJ5MSMQQlB0RRSPdfATxgMjEngmM5ZGc3m7llZl56HXw5IvIY8Yd/ihWGMsEFF9&reflink=article_copyURL_share
Watch the video. In his stock picks, he talks about the same stuff I spew on here about millennials demographic group carrying the coming economy. Exact same stuff. People are catching on to what I have been calling for years.
It’s a Fox News interview for all you righties.
https://apple.news/A-_r3nKzKQ7aAP2y-4Mdj9Q
Fast a lot of innocent people are being hurt by this shutdown. How about some compassion for them?
Gov shutdown is over. No way trump will shut it down again.
I can’t believe it took this long, I was feeling left out. I finally, finally, finally had my first Jehovah’s Witness knock on my door. I happened to notice something strange happening across the street.
Two modest cars, one black, one white parked across the street. A very old guy was driving the lead car. Everyone else who got out did not look related to the old dude. They were all black, including a 4 or 5 year old, except for one light skin Latina who was pretty hot. While I was watching, I was surprised that a black guy, dressed in a suite with overcoat, went straight for my door.
I think I put him off as I opened the door and said “Good Morning!” to him before he could say a word. Anyway…I had Jeff in and we had a long talk about Christianity. I think we saw eye to eye on almost all of it. I might have actually converted him.
Here’s the surprising thing. I’ve been feeling left out that I’ve never had a Jehovah’s Witness knock on my door. Now I feel like I’m part of the crowd.
^^^BTW, he was quite expressive in his thankfulness that I invited him in out of the cold. Our LR is by far the hottest room in the house. Welcoming white Christian invites you in to sit on a couch? I’m guessing he was afraid that I was going for a knife or gun when I had to leave the room to get my glasses to read his scriptures.
^^^I probably would have really confused him if I gave him a half pan of lasagna that my wife wants to throw out because it is a week old.
BTW, guys – An effective measure of your marriage is how often your wife makes homemade lasagna.
Enjoy your new friend!