08/11/2024
HOUSING NEWS
What Climate Change does to Property Markets
The real estate sector has long been familiar with the risks posed by climate change, including wind, hail, tornadoes, and flooding. The increasing speed of these events has raised concerns about the accuracy of risk measurement data. Researchers warn that the data currently used to assess these risks is outdated, and the slow dissemination of the latest information could contribute to a potential housing bubble.
Insurance companies are struggling to keep pace with the rapid changes in climate, as their methods for risk assessment are still developing. Accurate data is crucial for protecting investors and homeowners, but current maps and surveys often lag real-time events. To address this, the National Oceanic and Atmospheric Administration (NOAA) and the National Science Foundation (NSF) are establishing a research center to supply better climate change data to insurers. This initiative aims to help property owners and companies understand their true risks and necessary insurance coverage.
Read more at: ATTOM
FINANCE NEWS
Further Progress on Rate Cuts
The Federal Reserve’s monetary policy panel maintained the federal funds rate at a peak target of 5.5 percent following its July meeting. The Federal Open Market Committee (FOMC) stated “Recent indicators suggest that economic activity has continued to expand at a solid pace. Job gains have moderated, and the unemployment rate has moved up but remains low. Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee’s 2 percent inflation objective.”
While a rate cut appears possible by September, the National Association of Home Builders (NAHB) forecasts the reduction to begin in December. Fed officials have consistently indicated a preference for delaying rate cuts to avoid undermining long-term inflation expectations and central bank credibility.
Read more at: Eye on Housing
MORTGAGE NEWS
Is Buying an Older Home Beneficial?
Buying an older home presents a unique set of obstacles and opportunities compared to newer constructions. Homes built between 50 and 100 years ago are known for their durability, superior materials, and craftsmanship that newer homes often lack. These homes have weathered historical events such as the 1918 flu pandemic, the Great Depression, and various economic shifts, proving their resilience. Despite high mortgage rates and escalating home prices, older homes remain attractive, especially for younger buyers like Millennials and Gen Z. These buyers, often seeking affordability and willing to compromise on modern finishes, find value in the charm and established neighborhoods of older homes. Older homes come with distinctive features like mature landscaping, tree-lined streets, and proximity to amenities, which can be appealing. Potential buyers must consider the state of the home’s maintenance and any outdated systems. With thoughtful updates, older homes can be transformed into modern, comfortable spaces that honor their history while meeting contemporary needs.
Read more at: U.S. News
ECONOMIC NEWS
Housing Industry Takes a Toll on Construction Jobs
Amid a slowdown in home construction and high interest rates, the number of open jobs in the construction sector declined in June, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). This decline aligns with a slightly cooler labor market, which bodes well for future inflation and interest rate projections.
Specifically, the number of open construction jobs dropped significantly from 366,000 in May to 295,000 in June, with the highest impact seen in multifamily development due to sustained high interest rates. This reduction in demand for construction workers has led to fewer job openings in the industry, down from 414,000 a year ago. The construction job openings rate fell to 3.5 percent in June, the lowest since March 2023, correlating with the decrease in single-family and multifamily residences under construction.
