Another
Important Jobs Report
Every
month watching the release of the employment data is interesting.
However, with the Federal Reserve Meeting coming up in just a few weeks,
the jobs report will take on a special meaning. It has been a tumultuous
start to the year with stocks, oil prices and interest rates moving lower
in tandem. Before the year started, many were predicting the first rate
increase of the year by the Fed at the March meeting. Now most analysts
have changed their tune in this regard.
We should
not assume that the Fed has changed their mind. We have already seen
stocks trying to rally and a pick-up in consumer inflation for the first
time in a while. Add a strong jobs report to the mix, and the speculation
about the Fed will start up again. That does not necessarily mean that
the Fed will raise rates in March, but even a strong statement about the
health of the economy might be enough to affect the markets.
One thing
is for sure -- the markets are always changing and the changes can come
quite rapidly. Thus, we should not take it for granted that stocks are
going to have a down year and interest rates are going to hover at record
lows all year. This means the markets will be watching the jobs report
closely for any evidence that the economy is still producing enough jobs
per month in order to put upward pressure on wages.
Urban
homes are now worth more than suburban homes, as Americans place a
greater value on living in cities and in high-rise condos, according to
Zillow. The average urban home is now worth 2% more than the average
suburban home, Zillow said. Urban homes were worth 1.2% less than
suburban homes in 2013. Cities in high demand with young people are
seeing the biggest boost to the spread between the value of urban homes
and suburban homes. Still, suburban homes outpace urban homes, in terms
of average total value in many locales and other cities are seeing their
suburban homes rise in value faster than urban homes. Homebuyers' preferences
are changing, "as they seek amenity-rich, dense and walkable areas
that are often closer to their workplace," Svenja Gudell, Zillow's
chief economist, said in a news release. Source: National Mortgage
News
Unit size
on new residential construction is on the rise as more home buyers desire
extra space. But it's also coming with a much steeper price tag. The
average size of a new home rose to about 2,720 square feet in 2015, up
from 2,660 square feet in 2014, the National Association of Home Builders
reports. Nearly half of the homes constructed last year had four or more
bedrooms. A quarter of homes also had garages that would hold three or
more vehicles. In 2015, the average price of a new-home rose to $351,000
– up $100,000 from 2009, NAHB reports. Some of the increase is due
to builders catering more to the luxury market and moving away from
building homes for first-time buyers. “They haven’t made more starter
homes in recent years mainly because of land prices, construction costs,
and lack of available loans for less-affluent buyers,” The Wall Street
Journal reports. First-time home buyers tend to bring the average size of
new homes down since they tend to live in smaller homes than move-up
buyers. The average new-home size was 2,360 square feet during the 2008
financial crisis. It then started climbing sharply, leveling out in 2014,
and now back on the rise again in 2015. “Last year I was expecting, and I
wasn’t alone, that the average size of homes would actually fall …
because there were new measures that were supposed to bring in a wave of
first-time home buyers,” says Rose Quint, assistant vice president of
survey research at NAHB. “That didn’t happen.” Source: The Wall
Street Journal
It could
be a good year for women looking to buy real estate, particularly in
cities where their incomes are rising faster than those of single men.
For decades, single women played an important role in the U.S. housing
market, buying more homes than single men. But after the housing crisis,
the percentage of single female buyers dropped from 21 percent of
purchasers in 2009 to 15 percent in 2015. Now they may be poised to make
a comeback. For more than a year, the majority of respondents to a
prospective homebuyer survey by real estate brokerage Redfin have been
women—this according to more than 17,000 surveys completed on its website
since 2012. Rising incomes may be especially important because single
female homebuyers have traditionally stretched their budgets to buy
homes, said Jessica Lautz, managing director of survey research for the
National Association of Realtors. Many of them are single mothers or
widows, said Lautz: "They are making sacrifices financially because
they have a really strong desire to be a part of a community."
Beyond higher wages, here's another factor that could bring single women
back to the market: Because of their lower household incomes, single
women often shop in the same price range as investors looking for rental
properties, Lautz said. Such investors played a smaller role in many
local housing markets in 2015 than in previous years. Source:
HousingWire
