Posts Tagged ‘inflation’

New Job Growth, Falling Unemployment: Sufficient to Spur Homeownership Growth?

October 3rd, 2014 Comments off

question_mark_houses__fotosearchWhile analysts expected the jobs report to indicate 215,000 new jobs had been created in Sept., following the tepid 142,000  in August, the government says 248,000 new jobs were realized in September, more in line with the previous six months (before August) of job growth above 200,000. In addition, according to CNNMoney, the unemployment rate fell to 5.9 percent, the lowest number since July 2008. Job growth was strong in professional and business service, and the construction industry accounted for 16,000 new jobs. While critics of the administration claim the falling unemployment rate is due to people who have quit seeking work, the fall from a 7.2 percent unemployment rate one year ago would indicate otherwise. However, average hourly earnings are up just two percent in the last year, only a little ahead of inflation, which as MHProNews understands, may be insufficient to sustain a full housing recovery: If incomes remain flat, the millennials with loads of student debt currently living in their parents’ basements will not be able to afford homeownership. ##

(Image credit:–question mark houses)

MHC Residents: Incomes Chasing Rents

June 5th, 2013 Comments off

MHProNews has learned from castanet in Kelowna, British Columbia, Canada residents of SunRise Village MHC are concerned that rising rents may force them out of their homes, especially seniors on fixed incomes. With annual rent increases that include two percent above inflation, rents are rising faster than incomes, and residents are concerned site rents may rise $20 a month. A petition with nearly 400 signatures will be taken to the legislature with hopes of amending the Manufactured Home Park Tenancy Act (MHPTA) so the increase would be two percent land rental and 1.8 percent maintenance to allow for inflation. Residents contend four percent per year is too high. Member of the Legislative Assembly (MLA) Steve Thompson says a balance must be struck between what residents can afford and the return for owners sufficient to prevent the land from being developed for other uses.

(Photo credit: castanet–Sunrise Village, Kelowna, British Columbia, Canada)

Zell says the Stock Market will Tumble

May 17th, 2013 Comments off

Sam Zell, Chairman of Equity LifeStyle Properties, Inc. (ELS) tells Fortune magazine the stock market is riding high but the underlying fundamentals are weak and the market will fall. “The current euphoria in the stock market will be adjusted, and I hope that’s all that happens,” he says. Noting that large investors are buying houses in quantities, which is pushing up prices, he says they may end up losing money because managing a house is much different than managing apartments.  He says the stock market is like the housing bubble right before it popped, and criticizes the Federal Reserve for its Quantitative Easing, which will eventually lead to inflation. “We’re seeing a tsunami of liquidity. But I don’t know that necessarily means things are better,” he adds. As MHProNews knows, ELS is the largest owner of manufactured housing and recreational vehicle communities in North America with 380 properties and over 140,000 homesites.

(Photo credit: The Wall Street Journal)

Fed Prez: Bring on More Stimulus

January 17th, 2013 Comments off

CNNMoney informs MHProNews the president of the Federal Reserve Bank of Minneapolis, Narayana Kocherlakota, says the Fed should do more to lower the unemployment rate. “I would say that my outlook for unemployment and my outlook for inflation both point to a need for more accommodation than is currently being provided by the FOMC (Federal Open Market Committee),” he stated in a talk to the Financial Planning Association of Minnesota. While not a voting member of the FOMC, he has the opportunity to voice his opinion at the policy making meetings, and says the Fed should aim for an unemployment rate of 5.5%. That, he says, will increase the demand for goods but keep inflation below 2.5%. According to minutes from the Dec. meeting, some members believe the central bank should cease the asset purchases this year, others want to maintain the buying at its current level.

(Photo credit: Craig Lassig/Bloomberg via Getty Images–Narayana Kocherlakota)

Home Prices Post Largest Gain in Two Years Plus

November 30th, 2012 Comments off

According to the S&P/Case-Shiller Index, home prices registered the largest gain in over two years, moving up 3.6 percent in the third quarter over Q3 2011. CNNMoney reports the increase was the biggest since the second quarter of 2010 when the homeowner’s tax credit of up to $8,000 ended. A drop in foreclosures to a five-year low, an improving jobs market and record low interest rates have sparked home sales and home building. Dean Baker, of the Center for Economic and Policy Research, says “We’ll probably do better than inflation for the next few years, and people who have been underwater on their mortgage will get out from that, and build some equity.” Only Chicago and New York of the 20 markets surveyed showed a modest price decline from a year ago. As MHProNews has learned, Phoenix, AZ, which was one of the hardest hit cities following the housing crash, experienced the largest increase, with prices 20.4 percent higher than last year.

(Image credit: mortgagebroker)

Consumer Spending Rose in 2011

September 26th, 2012 Comments off

According to data released by the federal government, CNNMoney reports consumers spent an average of 3.3 percent more on household expenses in 2011 than in 2010. The average for annual spending increased to $49,705, the first yearly rise since 2008. It must be noted that inflation, however, rose 3.2 percent, offsetting all but the most minimal gain. The survey from the Bureau of Labor Statistics says consumer spending on gasoline rose 24.5 percent in 2011, as the nationwide average price of a gallon increased 26.4 percent. As MHProNews has learned, the price of gas hits those with the lowest incomes the hardest, taking 12.2 percent of their income versus 2.7 percent for the wealthiest. Spending on food in 2011 increased 5.4 percent, while health care expenses rose 4.9 percent.

(Image credit: Fotosearch)

Full Housing Recovery: Ten Years Away?

September 5th, 2012 1 comment

originationnews says while home values are expected to rise around four percent this year, the increase is driven more by low inventory than by rising demand. The rise in some markets is due to investors buying especially lower-priced homes, and flipping them in six months to a year as prices improve. Dean Baker of the Center for Economic and Policy Research, noting the vacancy rate rising on single-family homes in Phoenix, where prices have increased 14 percent since 2011, says, “That’s consistent with the story of speculation.” Unlike many others in the housing industry, he will not be surprised if prices fall again. He says house prices typically rise with inflation, currently at two percent, which means it will be ten years before prices return to their peak in 2006, especially given all the underwater mortgages. MHProNews has learned that many of the new jobs that have been created recently are lower paying jobs, which may coincide with the fact that many of the homes being sold are lower priced homes.

(Image credit: andyenstallblog)

Freddie Mac Speaks

June 21st, 2012 Comments off

WorldPropertyChannel reports Freddie Mac’s vice president and chief economist, Frank Nothaft, says due to rental demand by people postponing homeownership, rental activity has produced some good numbers in the housing market. The GSE’s U.S. Economic and Housing Market Outlook for June 2012 says for the year ending March 2012, the number of rental housing households increased four percent, some 1.5 million, with nominal rents rising 2-4 percent during that same period. However, average rent on an inflation-adjusted basis was below where it had been 1997-2007; and the vacancy rate has fallen only two percent in the last two years. Meanwhile, as MHProNews has learned from the National Council of Real Estate Investment Fiduciaries index, multifamily property values gained 25 percent in the last two years, but the numbers remain 14%  below their peak before the Great Recession.

(Photo credit: Homes-for-Rent)

CA MHC Successfully Challenges Rent Control

February 1st, 2012 Comments off

Bill Dahlin of the Hart, King & Coldren law firm in California has notified of its success in finally achieving a rent increase for Brentwood Mobilehome Park in Chula Vista, CA. The San Diego County Superior Court approved a $78.00 a month permanent rent adjustment which the city’s Rent Review Commission formally adopted. Brentwood first applied for the increase two years ago and has expended considerable resources seeking a reasonable return on investment. An adjustment of $45 a month spread over a three year period had previously been granted, but was challenged in court by Brentwood for being less than 50 percent of what had been requested. Last year Chula Vista amended its rent control ordinance to allow MHC owners to adjust home sites rents to market rate once a resident leaves. Attorney Dahlin notes with a turnover of 8-10 percent a year, community owners should be able to charge rent sufficient to keep pace with inflation, cover costs, and provide a reasonable return on investment.

(Photo credit: Brentwood Mobilehome Park)

Home Ownership: Good Investment?

January 4th, 2012 Comments off

HousingWire reports David Blitzer, chairman of Standard & Poor’s Index Committee, says when current home prices are adjusted for inflation, they are back to 2001 levels. This suggests the rapid rise and decline of home prices did little more than create havoc for the economy. “Allowing for a dip in home prices in the 1990s when inflation rose faster than houses, we’re almost back to 1989,” he says. As to whether buying a home is even a good investment, his response is that it depends on the economy, the real estate market, and the needs and finances of the buyer.

Photo credit: MoneyControl)