Housing Stats: Completions Down (Good) But Vacancies Up (Bad)
A lot of folks were turning the tables on some scary looking numbers yesterday, namely that housing starts and permits were down much farther than expected. The consensus was that's a good thing because it will inevitably bring down inventories. Simple math: the fewer homes you start, the fewer will end up on the market. But most missed an even better, less-long-term indicator from the same report, namely the "housing completions" number, which dropped 17 percent from the month before. These are homes that are going on the market immediately. To see an even larger drop in these homes is even better news for the over-glutted inventories.
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Big Fall in Energy Pushes Consumer Prices Down
Consumer prices in August posted the first monthly decline in nearly two years as Americans finally get a break from surging energy prices. The Labor Department reported Tuesday that consumer prices edged down 0.1 percent last month, a significant improvement from a 1.1 percent price spike in June and a 0.8 percent rise in July. The cost of gasoline and other fuels have plunged, reflecting big drops in crude oil prices.
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Bush Team, Congress Negotiate $700B Bailout
The Bush administration asked Congress on Saturday for the power to buy $700 billion in toxic assets clogging the financial system and threatening the economy as negotiations began on the largest bailout since the Great Depression. The rescue plan would give Washington broad authority to purchase bad mortgage-related assets from U.S. financial institutions for the next two years. It does not specify which institutions qualify or what, if anything, the government would get in return for the unprecedented infusion.
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Fed's No-Change Rate Decision Could be Followed Soon by Cuts if Markets Remain Unsettled
The Federal Reserve did not lower interest rates despite all the financial market upheavals in recent days, but that doesn't mean the central bank won't cut rates in coming weeks. Many economists believe Federal Reserve Chairman Ben Bernanke and his colleagues decided to save their remaining ammunition, given that their key lending rate is already at a low 2 percent, so that they will have room to make cuts later this year if markets remain turbulent.
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Federal Agencies Start Summit on Healthy Homes
Four federal agencies are hosting the first national summit on the topic, beginning Monday in Baltimore. Several U.S.-funded studies will be unveiled that show how renovations in Cleveland, Seattle and New Orleans lowered the risk of asthma and other health problems for residents.
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House Votes to End Ban on Offshore Drilling
In a stunning political turnabout, the House voted Tuesday to end a long-standing ban on new offshore oil drilling as part of an energy bill aimed at rebutting Republican election-year attacks that the Democratic majority wasn't doing enough to try to ease the public's pain at the pump. The measure would let states decide whether to permit energy exploration 50 miles off their coasts, ending a drilling ban that was put in place for much of the California coastline in 1981 and expanded to much of the rest of the United States in 1985. It would allow drilling 100 miles offshore regardless of a state's wishes.
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Federal Reserve: Interest Rate Stands for Now
Showing a tough love stance for now, Federal Reserve Chairman Ben Bernanke and his colleagues decided to keep a key interest rate steady Tuesday. They acknowledged stresses in financial markets have grown, though, and hinted they stood ready to lower rates if needed. Wreckage on Wall Street in recent days did not force the Fed - as some thought possible - to reverse course and cut rates.
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Builder Confidence Rises in September
Builder confidence in the market for newly built single-family homes rose for the first time in seven months this September, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI gained two points to 18, rising from its record low of the previous two months. "Builders have several reasons to be more optimistic at this time," noted NAHB President Sandy Dunn, a home builder from Point Pleasant, W.Va.  "Many are sensing that home sales are nearing a turning point with the support of the newly enacted first-time home buyer tax credit. Meanwhile, with the government's explicit backing of Fannie Mae and Freddie Mac now assured, this should help keep mortgage rates at very favorable levels going forward."
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RESPA Proposal Would Harm Housing Affordability
A Department of Housing and Urban Development (HUD) proposal relating to the Real Estate Settlement Procedures Act of 1974 (RESPA) "would result in significant increases in home purchase costs and undermine critical financing support at a time of severe mortgage and housing market turbulence," according to the nation's home builders. Testifying on behalf of the National Association of Home Builders (NAHB) before the House Subcommittee on Oversight and Investigations, Debra Still, president and CEO of Pulte Mortgage LLC in Englewood, Colo., told lawmakers that HUD's proposal to change its regulations relating to RESPA would "have an immediate negative impact on many consumers who purchase new homes."
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Housing Starts Decline 6.2 Percent in August
Nationwide housing starts declined 6.2 percent in August as home builders continued to cut back on new construction in order to scale back their inventories and help pave the way for housing market recovery, according to figures released by the U.S. Commerce Department today. "Builders understand that there is still a substantial amount of unsold inventory to be worked down, and they continue to do the right thing by reducing production and pulling fewer permits for new homes to help restore better balance between supply and demand," noted Sandy Dunn, National Association of Home Builders (NAHB) president and a home builder from Point Pleasant, W.Va. "With help from the new first-time home buyer tax credit and improving rates on home mortgages, the long downswing in production activity is slowly but surely putting us back on track to a healthy housing market."
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A Quest for an Energy-Efficient House
Preventing energy waste has become a household preoccupation in the era of nearly $4-a-gallon gas and rising prices for everything from airline tickets to milk. Whether motivated by environmental impulses or a desire to reduce utility bills, many Americans are researching ways to create a more energy-efficient home. Statistics from a range of sources provide plenty of motivation. The U.S. Department of Energy's office of Energy Efficiency and Renewable Energy (EERE) estimates that draft reduction within a home can lower energy costs anywhere from 5% to 30% annually. Meanwhile, according to Department of Energy data provided by the U.S. Green Building Council, homes account for 21% of U.S. carbon dioxide emissions. And claiming a green home remodel makes for great neighborhood bragging rights.
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