Archive

Posts Tagged ‘recession’

Young Adults may Finally be Moving into Own Homes

March 3rd, 2014 Comments off

There is one number, often overlooked, that affects the growth of the housing sector as much as any other—the percent of the 25-to-34-year-olds who are working. Many of these young adults continue to live at home, which holds down household formation. As their employment numbers grow, they are more likely to move out and form households, buying housewares to furnish their homes, which further spurs the economy.

As cnnmoney.com informs MHProNews.com, prior to the housing bubble young adult employment was in the 78-80 percent range, falling to 73.5 percent during the recession, and finally rising to the 75 percent range in 2012. As Jed Kolko, Trulia‘s chief economist and vice president of analytics, reports, last month that number hit 75.9 percent after fluctuating around the 75 percent mark for nearly two years. But, he says, it takes a while for that effect to impact the housing market: “It would be hard to get a lot of new household formation without a better jobs picture,” he adds. While the increase does not seem like much, each percentage point represents 400,000 jobs. ##

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Consumer Confidence Hits High Mark in December

December 31st, 2013 Comments off

Americans’ views of current economic conditions climbed higher than expected in December, gaining 6.1 points from the previous month to 78, hitting the highest consumer confidence level since April 2008, according to what Bloomberg reported on the Conference Board index. As unemployment falls and household finance rise, people become more optimistic and continue to support the economy with their buying habits. MHProNews understands consumer spending makes up nearly 70 percent of the economy. The index averaged 53.7 during the recession that ended in June 2009, reports rvbusiness.com.

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Raise Debt Limit or Risk another Recession, says Lew

October 10th, 2013 Comments off

Treasury Secretary Jack Lew told members of the Senate Banking Committee failure to raise the debt limit could result in the rise of interest rates, possibly jeopardizing the nascent housing recovery, as well as lead to higher costs on retirement accounts and make it more expensive to buy a car or start a business. Noting the rise in interest rates recently that slowed mortgage applications, Lew suggested another hike resulting from failure to raise the debt limit, combined with spillover effects including loss of value in the dollar and credit market disruptions, could potentially result in another recession, according to housingwire.com. Sen. Pat Roberts (R-Kan.) says 70-80 percent of the American people want to limit spending and President Obama’s response is that he will not negotiate. MHProNews learned Lew responded, saying, “Congress needs to open the government and make it possible for us to pay our bills,” and then the president will negotiate.

(Image credit: housingwire.com)

Mark Dotzour: Texas Housing Recovery in Full Swing

September 25th, 2013 Comments off

The Chief Economist of the Real Estate Center at Texas A&M University forecasts higher prices, reduced inventory and more home sales in 2014 for the state. Mark Dotzour says, “If you are a real estate professional in Texas, I would suggest that you not take a vacation at all in 2014. It is shaping up to be a busy year.” As MHProNews has learned, Texas suffered less than most other regions of the country during the recession, and the state has added 459,000 jobs since Jan. 2012, according to Dotzour, and he expects that to continue through 2014. According to timesrecordernews.com, although mortgage rates are slowly rising, they remain at historically low rates. Adds Dotzour: “In the late ‘70s, we thought 8 percent mortgages were cheap. Five percent was unheard of. Now the media is saying higher mortgage rates will make houses unaffordable and derail the housing recovery. It won’t. Look at the numbers for housing affordability indexes in Texas and the nation. Houses have never been more affordable, if you have a job.”

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Texas to need over Ten Million Housing Units

August 15th, 2013 Comments off

According to Jim Gaines from the Real Estate Center at Texas A&M University, the population of Texas is anticipated to increase to 30 million by 2050, a gain of nearly 120 percent, which will require 10.5 million additional housing units. The Dallas-Fort Worth area is expected to grow 163 percent to 16.8 million by 2050, and the greater Houston area will increase more than 143 percent to nearly 15 million. Rich Thomas, CEO of the MetroTex Association of Realtors, tells HousingWire many corporations are moving to the state, adding that the Great Recession did not hit the state as hard as many other parts of the country. He says, “We have such a diverse industry that people can come from virtually any kind of job opportunity and have places to work.” As MHProNews knows, Texas continues to be the monthly leading shipment state for manufactured homes.

(Image credit: city of Pecos, Texas)

President Obama Discusses the U. S. Housing Market

August 7th, 2013 Comments off

In a session with Zillow CEO Spencer Rascoff, President Obama fielded housing-related questions coming in via social media. Noting the recession and corresponding drop in home values was unlike anything seen in many years, he said refinancing could save homeowners $3,000 a year, although the housing market, while recovering, remains soft. He said despite interest rates continuing their upward trend as the economy improves, there is a lot of pent-up demand for homes which will play out soon. While suggesting that Republicans and Democrats should get together to support the Home Affordable Refinance Program 3 (HARP), he also noted the long-term goal is to reduce the amount of lending being underwritten and guaranteed by the government, and encourage private lenders to re-enter the market. To help homeowners during the recession President Obama said the maximum home value that could be financed was increased. As housingwire informs MHProNews, he suggested listeners contact their congressional representative to support HARP 3.

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Young Adults Postponing Household Formation

August 6th, 2013 Comments off

With Millennials (ages 18-31) continuing to have problems finding suitable work, 36 percent of them lived in their parents home in 2012, an increase of two percent from 2009, according to the Pew Research Center’s analysis posted in wsj.com. For some 25-30 years, the percentage has hovered around 30 percent, but since the Great Recession the number has been climbing. Some have enrolled in college, and many of those live in their parents’ home to save money; others living at home have postponed major life events such as marriage, which forestalls new household formation. Based on data from the Census Bureau, MHProNews has learned some adult children who are working continue to live at home to save money. Often, they cannot afford to live on their own.

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Modular Designer begins in U. S., Flourishes in Canada

July 4th, 2013 Comments off

Hive Modular of Minneapolis suffered mightily during the recession, but the company has been growing in Canada, enough to have three locations: Altona in Manitoba, Toronto, and one will be set to the east in Quebec. Hive started as a “night job” in 2005 by Paul Stankey and two friends, and has produced 25 custom homes. As MHProNews reported Sept. 21, 2012, a highly energy efficient, 2,075 square foot green house with three bedrooms and 2 1/2 baths was sited in Calgary for around $160 a foot. Hive offers custom made modulars to fit lot sizes and conditions, and the modules arrive on site complete: Painted drywall, electricals, fireplace, flooring, windows and kitchen. One feature offered by Hive is Plyboo cabinets—plywood-like material but made from bamboo with exposed edges that resemble marquetry. According to the globeandmail, one customer says, “You’d start getting pictures and half your house was built.”

(Photo credit: Paul Stankey/theglobeandmail)

New Home Construction Continues to Stimulate Economy

July 4th, 2013 Comments off

According to the Commerce Department, of the 45,000 new houses sold in May, construction has not begun on 16,000, nearly 36 percent, up from 26 percent a year ago, and over two times the 14 percent rate from 2008 during the recession. Total new home sales in May rose to their fastest annualized pace since 2008, and permits for building new homes increased to a five-year high. As mortgage rates increase and prices continue to rise, would-be buyers will want to lock-in interest rates, and increasing values make homes a more attractive asset to lend against. However, as National Association of Home Builders Chief Economist David Crowe points out, builders still feel stymied by tight credit as well as shortages in available lots, labor and materials. He estimates starts on single-family homes will increase 150,000 over last year, as nationalmortgagenews informs MHProNews. These figures indicate strength in the home building market which translates into stimulus in the overall economy: Each new home creates three jobs, and triggers purchases of building materials as well as appliances and furniture.

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Affordable Rental Units becoming More Scarce

June 27th, 2013 Comments off

The competition for affordable rental housing resulting from the recession, itself partly a product of the roughly 4.4 million people who lost their homes to foreclosure, has led to a shortage of homes for the extremely low-income sector. Defined as those earning less than 30 percent of the median income in their communities, their numbers increased by 2.1 million in the years from 2007-2011 to 12.1 million. Meanwhile, the number of rental units affordable to them dropped in that same period from 6.9 million to 6.8 million, according to a report by Harvard University’s Joint Center for Housing studies. As wsj.com tells MHProNews, tighter government budgets are reducing the building of subsidized housing just as more people are falling into poverty. Additionally, the number of households spending over half of their income on housing hit 20.6 million in 2011, an increase of 14.6 percent since 2007, and 49 percent more than in the previous decade.

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